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City Blocked From Implementing New Health Insurance Plan

Plattsburgh City Hall
WAMC/Pat Bradley
Plattsburgh City Hall

The city of Plattsburgh had planned to change its insurance benefit program for retirees in order to save a half million dollars. However the plan enraged a number of retirees who filed suit. On Monday, days before a final city budget is due, a restraining order was issued blocking implementation of the new insurance plan.
With less than two weeks before the city’s budget must be finalized, Plattsburgh officials are scrambling to calculate how to save the half-million dollars they would have saved by switching to a new health care plan.  
In October, the city of Plattsburgh Common Council approved switching its self-funded health care insurance benefit program for Medicare-eligible retirees to an Humana-administrated system.  Mayor James Calnon says the potential new coverage mirrored the self-funded plan but would have saved $500,000.  With the restraining order in place, he says there is considerable uncertainty over the budget.   “We have to be sure that our budget contains enough money to take care of the worst case scenario. As we go to budget we had been anticipating a $700,000 savings for the city as a whole.  About 500,000 of that would have been in the general fund. That means that at this fairly late hour in our budget process we have to look at how do we make up that $500,000.  We’re looking at all kinds of possibilities.  But in a situation where our general fund budget is 70 percent personnel costs, one of the things we have to look at is do we have any savings we can make in personnel.”

121 retirees did switch their coverage effective January 1st.  The restraining order pertains to 92 litigants affiliated with the Plattsburgh City Retirees Association.  Members of the association say they have been advised not to comment because the case is in litigation.

Ward 5 Democrat Becky Kasper says councilors had been working very hard to craft a budget that avoids layoffs and that comes in under the tax cap.  She says she’s discouraged that the challenge to the new health plan may force layoffs in the current work force.   “We really reviewed it to be certain that there would not be a drop in benefits for the retirees. And while there were some differences we have continually talked about how we can put in place a structure so that we can address wherever there might be weaknesses for particular recipients of benefits. It is discouraging to have hoped to have that saving in the budget for 2016 and now we have to have a budget passed by next week and we’re back to the drawing boards and having to very seriously consider layoffs.”

Regardless of the outcome of the case, the current restraining order will affect the tax levy, according to Mayor Calnon.   “Once a year is the time that we get to set our tax levy.  We can’t un-set that.  We can’t amend it once it’s there. So we’re going to have to set a tax levy that will be sufficient to cover the benefits in the worst case scenario.  And if we can set the tax levy as low as possible by looking at maybe some other potential reductions, then we’ll do that.”  

The city budget must be finalized by January 14th.  The next hearing on the petition challenging the change in health insurance is scheduled for January 21st.