Benefits committee recommends splitting insurer's 13.1% increase; employees to pay about 6.5%

The Clearwater Benefits Committee voted to recommend that city council adopt a renewal that splits the insurer's 13.1% premium increase with employees, resulting in an approximate 6.5% increase in employee contributions.

Committee members heard a recap from Sean of the Goering Group, who said the city's medical claims have been elevated over the past 24 months and that last year reserves were used to absorb some increases. Sean presented two options: applying the full insurer increase under the city's formula, or dividing the increase with employees so most workers would face only a 6.5% contribution increase. He told the committee that about 1,100 of the city's roughly 1,400 employees would see no change between the scenarios and that about 370 employees with dependent coverage would be most affected.

The discussion centered on risk and timing. Supporters of taking the full 13% said doing so would stabilize the fund and avoid a larger catch-up increase later if claims remain high; supporters of the 6.5% split favored limiting immediate financial pressure on employees and "rolling the dice" that utilization will moderate over the next 12 to 24 months. Sean said industry expectations suggest utilization could return toward pre-pandemic norms in the coming year, which would reduce pressure for further increases, but he cautioned there is no certainty.

The meeting recorded a sharp exchange over how to frame the impact on workers. One committee member said the combined effect of higher premiums and inflation was "almost a 24% reduction in take home" pay; Jennifer (on Zoom) responded that "the 13% increase of insurance does not equate to a 13%" pay reduction, urging the group to operate from a shared set of facts. The committee did not produce a wage-offset proposal during the meeting; members noted average general wage increases and merit adjustments around 5% this year, which would not fully offset the pressures discussed.

A committee member moved to accept the second scenario (employee contributions rise about 6.5% with a city subsidy) and another committee member seconded. Committee members present and online raised hands for the motion; the chair confirmed that everyone voted in favor. The committee will forward the recommendation to city council, likely at the council's second meeting in August, and will notify members once the item is scheduled and after council action.

The committee chairman closed the meeting after confirming there was no further business.