Police, fire unions reach agreement after filing lawsuit against City over health benefits

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INDIANAPOLIS, Ind. (Sept. 23, 2014)– The Indianapolis Fraternal Order of Police Lodge 86 and the Indianapolis Professional Firefighters Local 416 announced Tuesday they have reached an agreement with the City of Indianapolis regarding their health insurance benefits.

Earlier this month, union leaders filed a lawsuit against the City due to proposed changes to their healthcare plans and accused the city of violating current contracts.

According to the lawsuit, the city planned to get rid of the current HMO advantage plan beginning this January. The plan would have been replaced by a health savings account or (HSA).

FOX59 obtained a copy of a letter the City sent to union leaders on Sept. 2. The letter from City Controller Jason Dudich read, “maintaining the current model is not suitable for the city because budgets are tight.”

The letter described a three-tiered HSA plan that will be available to employees. It said each employee will have their own health savings account. The city will contribute funds and employees can make pre-tax contributions. Employees can earn more city contributions through wellness programs and exams.

Tuesday, the City agreed to honor the existing health care agreements and retain the insurance plan offerings and the HMO it had previously offered its employees through 2016.

According to FOP, the settlement with the City provides as follows:

  1. In 2015, the city would retain the Advantage HMO plan, the Advantage CDHP and the Anthem CDHP.  The 2015 plans would include the following provisions:
  2. All members on a consumer driven high deductible plan would pay 10% of the total cost for 2015 and the city would pay 90%
  3. All members on a HMO would pay 15% of the total cost for 2015 and the city would pay 85%
  4. The City will make HSA Contributions for all members on a consumer driven high deductible plan for 2015:
    1. Single employees on a consumer driven high deductible plan will have $1,000 placed into their account at the first of the year
    2. Non-single employees on a consumer driven high deductible plan will have $2,000 placed into their account at the first of the year
    3. Both single and non-single employees will be able to earn the remaining $250 or $500 at the first of the year through a physical with biometric screening and a health risk assessment in the prior calendar year. Member who failed to obtain a physical in the previous calendar year can receive the same benefit following such an exam in the current calendar year.
  5. The city will contribute HSA funds to those police and fire pre-65 retirees on the Advantage or Anthem CDHP, as determined by the FOP and Local 416’s respective RHIF committees.
  6. The City will provide onsite clinics available to members on the consumer driven high deductible plans only.
  7. Any member hired/starting on or after 1/1/15 will be automatically enrolled in the Anthem consumer driven high deductible plan.
  8. During 2015 as the City negotiates health insurance plan design and cost adjustments for 2016, if the HMO plan increases by more than 8.0% from the immediately preceding year (after any plan design adjustment) the City has the right to eliminate the HMO and any other fully insured plan and move to a full consumer driven high deductible plan self-funded plan design.
  9. In 2016, those members on a consumer driven high deductible plan would have the premium split changed from 90% employer and 10% employee to 87% employer and 13% employee.
  10. In 2016, the premium split for HMO members will remain 85% employer and 15% employee.

The unions released a joint statement Tuesday.

“The Indianapolis Fraternal Order of Police Lodge 86 and the Indianapolis Professional Firefighters Local 416 are pleased to have resolved a dispute with the City of Indianapolis regarding public safety employee health insurance benefits. The ability of the City, FOP 86, and Local 416 to come together and solve this disagreement, prior to extensive litigation, demonstrates what the City and our organizations can accomplish when they work together. We hope that we can all continue to build from this mutual success and work together as we continue to serve and protect the citizens of Indianapolis.”