SMITHFIELD — After a brief budget-cutting scare, town employees will keep all of their health-care and retirement benefits.
The Town Council voted unanimously Tuesday night to use a new health-insurance provider – First Carolina Care – for employees and their dependents. Town Manager Paul Sabiston said he persuaded First Carolina to sell the town insurance for less than it had proposed, and that allowed the town to keep dependent-care insurance.
Sabiston said he began talking to First Carolina after the town’s current provider, WellPath, said its rates would climb by nearly $100 per employee per month in the year ahead. First Carolina trimmed $30 off that $100, and then Sabiston persuaded the company to knock another $20 off that.
“I gave them what I thought would be a better approach, and they took me up on that,” Sabiston said.
That saved the town enough money to keep insurance coverage for employee dependents. Sabiston said the First Carolina contract would also save $26,000 over what WellPath proposed.
“As some people might say, it’s like finding money in the street,” Sabiston said.
But Councilman Perry Harris reminded everyone that the First Carolina contract still represented an increase in spending over the current year. In all, taxpayer spending on employee health insurance will rise 15 percent in the year ahead, he noted.
That’s in a year when the council pledged to cut spending 5 percent.
“I just wanted us to keep that in the back of our minds,” he said. “ That’s a $100,000 increase for employees alone.” Higher premiums for employee spouses and children will add to that total.
Human resources manager Tim Kerigan said employees’ 401(k) benefits were safe too. Smithfield taxpayers currently provide a 3-percent match for 401(k) accounts. That’s on top of fully funding each employee’s traditional pension.
Kerigan said the savings from the new health care provider “helped solidify” the 401(k) match. “The council made it clear in its last meeting that both benefits were equally important,” he said, referring to dependent-care insurance and the 401(k) match.
The council and town manager began looking at possible benefit cuts after it learned from WellPath that the insurer planned to raise premiums by 25 percent. That prompted Sabiston and council members to look at both the 401(k) match and dependent-care insurance. At the request of council members, town staff sent out a survey asking employees which benefit was more important to them.
The survey was alarming enough to bring much of the public utilities department to Town Hall for the council’s June 4 meeting. And many firefighters refused to pick between the two options on the survey.
Council members got the message. During their brief Tuesday meeting, they agreed to keep all benefits in tact.
Sabiston said employees could expect a level of health insurance coverage similar to what they have now. First Carolina Care has been expanding rapidly in Eastern North Carolina and is now the provider for several towns and counties in the region, he said.
“They’re filling that void where it used to be Blue Cross insurance,” Sabiston said. “They’re getting more and more aggressive.”