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Judge: City can implement new insurance plan
HUNTINGTON -- Cabell Circuit Judge John Cummings issued an order Friday allowing the city of Huntington to implement a new health insurance plan for its active employees July 1.
The judge also ruled the city must continue to offer the current health insurance plan to police and fire retirees for four months or until both sides can reach an amicable agreement.
The city covers approximately 360 active employees and 160 retirees on its self-insured plan.
The ruling comes a day after Cummings heard arguments and testimony from attorneys representing the city and two of its employee unions, Fraternal Order of Police Gold Star Lodge 65 and International Association of Firefighters Local 289.
The unions sought an injunction in court to block Mayor David Felinton from implementing a new health insurance plan that will require active city employees to pay higher premiums starting July 1. The unions alleged Felinton acted in bad faith when he announced June 10 that he would change health insurance plans unilaterally during contract negotiations.
Under the new health insurance plan, active employees' premiums will be about six times higher than the $12 or $25 a month they pay now for single or family coverage. Individuals will be required to pay $73 a month, while family premiums will increase to $153 a month.
The plan will include a pre-tax program by which employees can have their premium contributions deducted before taxes. The estimated savings will be more than 25 percent, according to city officials.
Annual deductibles for active employees will be $1,500 for a single employee or retiree and $3,000 for a family plan. Deductibles are currently $250 per person.
The city will offer employees annual health reimbursement accounts of $1,000 for individuals and $2,000 for families to help pay deductibles and other out-of-pocket expenses.
Felinton described the ruling as fair and said the city will take immediate steps Monday to halt the proposed health insurance changes for retirees.
Attorneys representing the city argued during Thursday's hearing that an injunction would force the city to cut almost $3 million out of its budget to pay for the current health insurance plan next year. That's money budgeted now for six new police officers and six police cruisers, among other things.
Felinton said the order still will result in cuts to the 2008-2009 budget that takes effect Tuesday, "but we certainly won't see the drastic cuts that we were afraid we were going to see."
Felinton said city officials should know by Monday how much they will have to cut out of next year's $38.8 million budget.
Carl Eastham, president of IAFF Local 289, said the order is a victory in that it provides relief to retirees.
"It's not a home run for us by any stretch of the imagination," he said. "At least the judge recognized there would be a detrimental effect on our retirees."
Cummings heard testimony Thursday from retired firefighters and police officers who said they could potentially lose their homes if they were forced under the new health insurance plan.
Eastham said the IAFF could seek an injunction from the state Supreme Court, but he does not expect his union to take that step. Representatives for the FOP did not return calls seeking comment.
"We got a significant part of what we were looking for, which was relief for our retirees," Eastham said. "We now plan to sit down with the city and reach an agreement for our retirees that both sides can live with."
The unions filed a complaint last week along with their request for a temporary injunction. The complaint is still pending in court. The city has 20 days to respond to the complaint or file a motion requesting that it be withdrawn.
Cummings said in his order that the active employees have failed to show they will suffer irreparable harm if they are forced under the new health insurance plan. However, they could be awarded monetary damages if they are victorious with their complaint, he said.
