County cuts health benefits

Convinced that the county no longer can afford spiraling health insurance premiums, Sonoma County supervisors told thousands of retirees and employees Tuesday that they will have to pay an increasing share of the cost.

Supervisors conceded their vote would be unpopular with the 2,500 retirees and 650 non-union workers who will be affected by the cost restructuring beginning in June.

But handing out less county money to pay for health insurance is better than none at all, the five supervisors unanimously decided at the end of a three-hour hearing and debate.

"No question it is a lower level, but if we don't do that, a future board will say, sorry, we can't afford it," said board Chairman Mike Kerns.

Supervisor Mike Reilly, his eyes reddening as he struggled to hold back tears, read a prepared statement, saying, "We have not found a way to resolve the issue without disadvantaging retirees."

And Supervisor Paul Kelley said, "If we don't make a fiscally responsible decision now, the overwhelming credit card balance will come due."

Also voting in favor were supervisors Tim Smith and Valerie Brown.

County officials say cutting payments for future health care premiums, which are growing at 7 percent to 10 percent a year, is necessary to make up a $15 million annual deficit in funding commitments for health care premiums, expected to total $407 million over the next 30 years.

Similar proposals to cut health care contributions to about 2,000 union members provoked a large noontime rally that began just as supervisors voted.

Earlier in the morning, more than 300 retirees and their supporters crowded into the board chambers, spilled into the hallway outside and sat in folding chairs on the plaza outside the administration building.

During a 90-minute public hearing, many retirees and employees said they felt "frustrated," "angry," "abused and discarded" because they're being forced to put more of their pensions into paying bigger shares of their health care premiums.

"I'm sorry to say I have little respect for the county leadership," said Debra Watts, a 35-year employee with the county.

Chip Atkin, a county social worker and union organizer, said, "You have lost the trust of the employees and retirees, and you risk losing the trust of the public."

Administrators, however, argued during an hour-long presentation that the level of county health benefits for employees and retirees was well above that provided by other Bay Area counties or in private industry locally. They said the annual commitments to health care are 7.5 percent of payroll, a level that is three times that of Solano and Monterey counties.

"It is not a popular comment, but when we look at the unfunded liabilities," said Assistant County Administrator Jim Andersen, the proposed shift in health premium contributions "is not only fair but is on the generous side."

Later, Supervisor Paul Kelley echoed that sentiment, saying, "Most of the taxpayers that are funding this package do not get the same thing."

Currently, the county provides non-union workers 85 percent of the premium for any plan selected, and gives retirees 85 percent of the lowest-cost premium, either for an individual or couple.

Under the adopted recommendations, there will be a gradual reduction of 20 percent annually over the next five years in the county's contribution to retiree and non-union health benefits to $500 a month.

Nearly two-thirds of the 2,400 retirees would experience a drop in county contributions to their medical premiums. Those who insure dependents or who retired before age 65 are likely to see the biggest reductions.

For example, an early retiree insuring a dependent under age 65 on the least expensive PPO plan is now getting $1,043 a month. That amount would be reduced by 20 percent each year until 2013 when the $500 monthly level would be reached.

About 900 county retirees whose insurance premium is less than $500 would benefit by the changes, which take effect next June.

Retirees and employees argued they had accepted years of wage concessions in exchange for pledges of future health care benefits for them as well as their dependents.

However, Brown said those promises of health benefits were now in conflict with other financial crises, such as the mortgage lending meltdown that has contributed to a flagging economy and plummeting government revenues.

"I was not here for all the promises and I have to deal with the budget that is terrible," Brown said. "I know from the way you're shaking your heads that is a no-win."

You can reach Staff Writer Bleys W. Rose at 521-5431 or bleys.rose@pressdemocrat.com.