Non-union City of Springfield employees will receive 2 percent wage increases each of the next three years, but the raises are contingent upon changes to health care plans, according to city officials.
It will be the first raise for non-represented employees since March of 2008, according to city personnel director Jeff Rodgers.
“It’s been awhile,” Rodgers said.
In order to receive the increases on July 1, non-union employees will be required to sign up for a high-deductible health insurance plan and a health savings account before the new open enrollment period ends on June 30.
Of the city’s 570 employees, approximately 140 are not represented by a union, Rodgers said.
The raises will cost approximately $216,000 per year, according to city finance director Mark Beckdahl. The cost of the wage increases will be offset by the changes to the health care plan, Beckdahl said.
“There’s a significant savings by having them go to an HSA,” Beckdahl said.
The city commission approved the raises by emergency ordinance at Tuesday’s meeting.
A high-deductible health insurance plan has lower premiums and higher deductibles than a traditional health plan, meaning employees pay more out-of-pocket before insurance kicks in. A health savings account, or HSA, is a tax-advantaged medical savings account available to U.S. residents enrolled in a high-deductible health plans. The funds deposited into the account are not subject to federal income tax. The funds also stay in the account if they’re not spent, unlike a flexible spending account.
The city commission also entered into agreements with UnitedHealthcare and Superior Dental Care, Inc. to provide health insurance and dental insurance, respectively, to city employees.
Medical Mutual served as the city’s health care provider since July of 2012, but it opted to go with UnitedHealthcare as its new carrier because of better pricing, Beckdahl said.
The city spends approximately $7.1 million per year on health insurance, Beckdahl said. The change to UnitedHealthcare was still an increase, Beckdahl said, but not as large of an increase as they’d expected. The city budgeted a 13 percent increase in health insurance for this year.
“With the combination of our moves in insurance, we can pay for our raises and still stay under budget,” Beckdahl said.
The city also reached a collective bargaining agreement with the International Union of Police Associations. The three-year deal will allow the 14-member police clerk unit to receive 2 percent raises each year. The raises will cost the city approximately $11,000 annually, Beckdahl said, which is also contingent upon the health care changes.
The Springfield Police Patrolman’s Association, which represents the city’s police officers, received a similar deal last December. The city is planning to negotiate similar deals for other units, but each negotiation is different, Rodgers said.
“It’s certainly the pattern that’s developing here,” Rodgers said.
The Springfield News-Sun is committed to covering city commission actions, including recent stories on the city’s bike plan and the recently approved half-percent income tax renewal.