Audit Examining City’s Health Insurance Dependents

Manager Dennis Dare says that if you receive benefits from the town of Ocean
City, you are going to need to fill out some forms and show some proof, if you
haven’t done so already.

As the Mayor and Council
continues to debate how generous the benefits packages should be for newly
hired members of the town’s rankings, Dare pointed to a “Health Insurance
Dependent Eligibility Audit” that is currently being conducted by Bolton
Partners in Baltimore to show that the town is actively trying to ensure that
everyone who is covered under the town’s medical umbrella should be there.

“It is something that
we’ve done in the past, and it’s kind of a routine housekeeping measure to make
sure that everyone that is on the books is eligible for coverage,” said Dare.
“Sometimes a kid graduates from college and should be taken off the list and
isn’t, or in other cases, a grandparent covers a grandchild, which shouldn’t
happen either under our policy.”

In recent weeks, the
council, most notably Councilmen Joe and Jim Hall, have been arguing and
debating the compensation packages (salaries and benefits) that should be
offered to new hires in the town of Ocean City when the 20-month hiring freeze
is lifted.

Both Jim and Joe Hall
argue that the current level of benefits and in some cases, salaries, are much
too generous in Ocean City, and argue that with rising health care premiums, if
nothing is done now, the bottom line is that the resort’s bottom line will

“This is something that
is going to break the town if we don’t get a handle on this now,” said Jim Hall
during a recent council discussion at City Hall.

The town offers three
health coverage plans to its full-time employees, including the Mayor and City
Council, who some have argued are technically part-time workers.

Budget Manager Jennie
Knapp told The Dispatch last week that employees must contribute 10
percent towards their healthcare, which includes, dental, vision, health and
prescription coverage.

A “single” plan from the
town’s provider CareFirst ranges in the $6,000 per year range, with “plus
one”  (ie, an employee and spouse or
employee and child) is in the $15,000 a year range. For full family coverage, the
cost of the plan, prior to the employee’s 10 percent contribution is upwards of

Dare said that he
expects the study to find some ineligible candidates for town health coverage
and noted that he believes the cost of the study will be covered by the initial
savings found in the current study, which he says should conclude in August.

“Remember, if there are
people that aren’t supposed to be covered that are, it’s going to be an ongoing
savings from year to year for us,” said Dare. “Usually, we have an amnesty period
where we give employees the benefit of the doubt and they can remove the
ineligible person from their health plan. 
But, if they don’t, they could be penalized, meaning they might have to
back pay us for the time they had someone ineligible on their premium.”

Dare said the study will
require employees to provide children’s birth certificates as well as marriage
licenses to ensure that no employee is keeping an ex-spouse on the plan.

Dare points to the fact
that the city’s workforce is aging, and in a decade, there will be a proverbial
changing of the guard in the town’s hierarchy. He also noted that salaries
would decline through attrition when the 30-plus year veterans of the town
retire in future years.

“They have earned their
salaries through their dedication and some of them have reached the top end of
their pay grade, and when we backfill their positions, the next person will
naturally be paid less than someone who has been here 30 years,” said Dare,
“but if we want to keep bringing good people to work for the town, we need to
stay competitive with what we are offering in a compensation package.”

Last week, Human
Resources Director Wayne Evans and Dare presented the first part of a salary
study that showed that Ocean City’s salaries were comparable with local,
regional and even state salaries for like jobs.

However, both Jim Hall
and Joe Hall were unsatisfied with the report, saying that they were looking
for “the cost” of the employee and not just what the employee makes per year.

Dare and Evans said that
the second part of the study, which will give an in-depth look on health
benefits, could come in future weeks or it may be contingent on the Bolton

Either way, Mayor Rick
Meehan points to the “sticker shock” that some in the local community have felt
when seeing the five- and six-figure salaries earned by Ocean City’s top
ranking officials. He says that it is human nature to think someone gets paid
too much, but noted that times are much different than they were 20 years ago.

“The world has changed
and the cost of an education and the salaries that those high priced educations
are demanding are remarkable now, but we have to be fair and competitive, and I
think the first part of the study showed that we are,” Meehan said. “If the
information is presented to you and it doesn’t fit your argument, you shouldn’t
bash the study. You should look at the argument that you are making. It’s like
going into a public hearing with your mind already made up.”