MONROE - Health care costs are rising, benefit plans are soaring.
With no control over those costs, employers are wondering how to handle retiree benefit plans. Some companies are choosing to reduce or eliminate them. The City of Monroe is no different.
City Administrator Mark Vahlsing said the city still maintains health insurance benefits for its retirees.
The City of Monroe is self-insured, with a third party administering the funds. All contributions to the plan are deposited in a pool, from which claims are paid. The city shares part of the costs of premiums for its employees, but retirees who remain on the health plan pay the full contributions to the plan. Retirees also pay the full amount for any dependents they add to their policy.
Last year, the Salary and Personnel Committee set a policy to allow retirees who remain on the plan to add and delete dependents, but it decided not to allow retirees who left the plan to return.
"Employees are allowed to opt out, and go back on later, by law," Vahlsing said. "But for a spouse who returns after an absence, the retiree has to be active."
But to allow a retiree to leave the plan and return later was a bit of a stretch for the city's plan.
"They didn't want to set a precedent," Vahlsing said about the committee.
The reasoning behind the cut-off status for retirees was that older people have more chance of health risks.
Private companies are using a variety of ways to off set the raising costs of retiree health care benefits: increasing retirees' contributions for premiums, copayments or coinsurance for prescription drugs, deductibles for health care services and out-of-pocket limits on retirees' obligations.
As its own self-insured entity, the City of Monroe has a "pool built up," Vahlsing said. But even that has its limits as to how much it can pay out in claims. Therefore, the city has a backup insurance policy for claims that exceed $50,000 per person per year.
As more baby boomers start to deal with health problems that come with old age, and are more prone to illness and disease, claims can be expected to rise. And early retirement may not be an option. Many employees who retire early have few health care options, until Medicare eligibility kicks in at age 65.
The U.S. Department of Labor Web site cautions, "private-sector employers are not required to promise retiree health benefits. Furthermore, when employers do offer retiree health benefits, nothing in federal law prevents them from cutting or eliminating those benefits--unless they have made a specific promise to maintain the benefits."
The self-insured Monroe's city employee health plan is no different. The plan states that it can be amended at any time, and just to be covered completely, states the "plan administrator (the city of Monroe) will have full discretion to interpret plan terms, make decisions regarding eligibility and resolve factual question."
With no control over those costs, employers are wondering how to handle retiree benefit plans. Some companies are choosing to reduce or eliminate them. The City of Monroe is no different.
City Administrator Mark Vahlsing said the city still maintains health insurance benefits for its retirees.
The City of Monroe is self-insured, with a third party administering the funds. All contributions to the plan are deposited in a pool, from which claims are paid. The city shares part of the costs of premiums for its employees, but retirees who remain on the health plan pay the full contributions to the plan. Retirees also pay the full amount for any dependents they add to their policy.
Last year, the Salary and Personnel Committee set a policy to allow retirees who remain on the plan to add and delete dependents, but it decided not to allow retirees who left the plan to return.
"Employees are allowed to opt out, and go back on later, by law," Vahlsing said. "But for a spouse who returns after an absence, the retiree has to be active."
But to allow a retiree to leave the plan and return later was a bit of a stretch for the city's plan.
"They didn't want to set a precedent," Vahlsing said about the committee.
The reasoning behind the cut-off status for retirees was that older people have more chance of health risks.
Private companies are using a variety of ways to off set the raising costs of retiree health care benefits: increasing retirees' contributions for premiums, copayments or coinsurance for prescription drugs, deductibles for health care services and out-of-pocket limits on retirees' obligations.
As its own self-insured entity, the City of Monroe has a "pool built up," Vahlsing said. But even that has its limits as to how much it can pay out in claims. Therefore, the city has a backup insurance policy for claims that exceed $50,000 per person per year.
As more baby boomers start to deal with health problems that come with old age, and are more prone to illness and disease, claims can be expected to rise. And early retirement may not be an option. Many employees who retire early have few health care options, until Medicare eligibility kicks in at age 65.
The U.S. Department of Labor Web site cautions, "private-sector employers are not required to promise retiree health benefits. Furthermore, when employers do offer retiree health benefits, nothing in federal law prevents them from cutting or eliminating those benefits--unless they have made a specific promise to maintain the benefits."
The self-insured Monroe's city employee health plan is no different. The plan states that it can be amended at any time, and just to be covered completely, states the "plan administrator (the city of Monroe) will have full discretion to interpret plan terms, make decisions regarding eligibility and resolve factual question."