Most Johnstown city employees joined a new health care plan this month.
Administrators, along with workers from three unions – AFSCME, United Steelworkers and the Fraternal Order of Police – switched from a Highmark PPO to Highmark’s Community Blue. The change helped the city save about $158,000 from what the price would have been for remaining with the original plan, although Johnstown’s overall cost for its approximately 150 employees still went up from $1.3 million to $1.4 million between 2012 and this year.
“It’s huge, and we’re only able to do that with the cooperation of our employees,” said City Manager Kristen Denne. “I would like to commend the employees that helped the city make these types of savings.”
The arrangement is in place for one year. City officials will explore their options again for 2014.
“The city will be actively pursuing all avenues to try to keep the health care costs under control, as it is one of the largest expenditures that the city has now,” Denne said.
Only one union, the International Association of Firefighters Local 463, opted to remain with the original plan.
Because of recent arbitration decisions, the firefighters contractually had the right to keep the health care plan through Dec. 31, 2014, unless negotiations took place. “Basically, what that does is lock us in to that particular health care until the end of the agreement,” said Local 463 President Randy Novosel.
The firefighters and city attempted to negotiate a deal, but could not come to an agreement on certain out-of-network costs, according to Novosel.
University of Pittsburgh Medical Center hospitals, services and physicians are considered in-network for the Highmark PPO. However, almost all UPMC facilities are out-of-network in the Community Blue plan. Novosel said the union would have accepted the new plan if the city would have agreed to cover the difference in out-of-network costs that would have resulted from the change.
“We were willing to switch with that stipend on the end of it that they would make us whole for anything that would change, and they wouldn’t agree to do so,” said Novosel.
Paying for the out-of-network compensation would not have been financially beneficial to the city, according to Denne.
“They had made a list of demands that the city would not have been able to meet,” she said. “The list of demands that they had asked for would be in excess of any savings that we would have.”
Having the 33 local firefighters remain in the original PPO this year will result in the city spending $60,000 more in health care costs than if they had joined Community Blue.
UPMC offered a plan, nearly identical in cost to Community Blue, but only if all city employees joined.
Click here to subscribe to The Tribune-Democrat print edition.
Click here to subscribe to The Tribune-Democrat e-edition.