SNOW HILL – County officials are continuing to investigate ways to lower the costs of retiree benefits.
At the request of the Worcester County Commissioners, Stacey Norton, the county’s human resources director, presented ways the county’s OPEB (Other Post Employment Benefits) costs could be reduced last week. The presentation came after several commissioners in recent months questioned the growing expense.
“I think retirement benefits in the future are going to be the downfall of all municipalities,” Commissioner Joe Mitrecic said.
Mitrecic and other commissioners have questioned the growing cost of providing insurance coverage to the spouses and dependents of retirees in recent months. Though for years the county covered the cost of insurance for both the retiree and his or her spouse and dependents, officials agreed to a slight change this year. Starting July 1, new hires, upon retirement, will be able to maintain coverage for their family members at an 80/20 rate — the county will cover 80 percent of the premium while the employee is responsible for 20 percent.
“We feel this is most attractive not only in recruiting staff but in retaining staff,” Norton said.
Other options available to the county, she said, were having retirees cover 100 percent of the premium for their family members or offering a cost share of 50/50. Norton said having retirees cover the entire premium cost would provide savings of $261,227 in FY 2030 and $714,847 annually by FY 2040.
Norton presented cost share formulas for a number of other municipalities for comparison. She said the state offered an 80/20 cost share.
Norton said she thought the best way for the county to control its health care costs was to promote its wellness program. Currently, there are 2,532 members of the county’s health plan. More than 1,300 of those are dependents of employees while 921 are spouses.
Norton said that 17 percent of health plan members accounted for more than 60 percent of the county’s health care costs, as they were dealing with critical illness or chronic disease.
Norton said she was disappointed to see that close to 20 percent of the county’s health plan members didn’t have a primary care physician. Only 16 percent of members are taking advantage of the annual physical offered to them free each year.
“It was eye opening to me,” Norton said, adding that she wanted to push the importance of preventative care.
She said she was working to increase awareness of the benefits employees were allowed through the health plan. She has also compiled a list of primary care physicians within the local area who are accepting new patients.
Commissioner Jim Bunting agreed that promoting preventative care was important.
“We’re trying to stop things before they happen,” he said.
Mitrecic maintained that the county could save a significant amount of money by adjusting its coverage of retirees’ spouses and dependents. He said that with 921 spouses covered, he thought savings to the county would amount to more than $261,000. He added that he was anxious to see the actuarial study in the coming month.
“I think that if anybody that stays abreast of what’s going on in this country, these towns and cities and counties and states that are going broke are going broke because of their retirement packages,” Mitrecic said.
