With Two Councilmen Opting Out, City Will Spend Less on Health Benefits

San Juan Capistrano taxpayers will spend slightly less on medical benefits for City Council members this year, as and have opted out of theirs.

The savings come even after a 17 percent hike in insurance premiums this year, a reflection of all of the changes in the health care industry, said Kathleen Springer, San Juan's human resources manager.

In 2010, taxpayers paid $53,001.72 for health, dental and vision premiums for the City Council, including $3,900 to Mark Nielsen, who received a stipend for opting out of his benefits, according to data provided by the city. In 2009, the city reported to the state controller's office that its costs totaled $50,082.

This year, taxpayers will spend $12,390.72 for Mayor Sam Allevato’s insurance, $12,850.20 for Laura Freese’s and $18,185.16 for John Taylor’s—totaling $43,426.08, according to information provided by the city clerk.

The city pays 100 percent of the highest CalPERS HMO premium, including for family members. Dental and vision insurance are also provided at no cost to employees. Those who enroll with other medical carriers with a lower premium receive the difference between their premium and the city's plan.

Those who select a plan more expensive than the highest CalPERS HMO pay the difference out of pocket. Those who opt out of the medical insurance plan receive $325 per month.

At the last City Council meeting, held Feb. 1, San Juan Capistrano resident Mamie Yong Maywhort challenged each member to follow in the footsteps of the Laguna City Hills city councilwoman who she said is forgoing her medical benefits because her employer already provides them.

Such is the case with Kramer, a retired military officer with access to Medicare and TriCare, and Reeve, an attorney and college professor.

“I don’t really have too much problems that they accept the insurance, and I don’t believe that others do, either,” said Maywhort. “It is the fact taxpayers are paying for the whole tab–employee and dependents. They need to pay their fair share just like their private-sector counterparts.”

But Allevato, who is retired, and Freese and Taylor, who are self-employed, say that without the city's insurance plans, they'd be left without coverage.

"So what—then I don’t have medical insurance? How stupid is that?" Allevato said. "I'd have to start paying $1,500 a month; I only get paid $300 a month. Why would I do that?"

In an e-mail, Taylor said serving as a member of the City Council is full-time work, with lots of job requirements and an “on-call” nature.

"When I ran for the City Council, I didn’t assume that I would a get a stipend or be eligible to participate in the city’s health plan, but since I am self-employed, this benefit means a lot to me," he said.

These benefits are part of the memorandums of understanding signed one year ago with the two bargaining associations that represent city employees. The two-year memorandums may be reopened for negotiations.

"Our employees over the years bargained for that in good faith,” said Allevato. “To go in and reduce peoples’ salaries and reduce their benefits … these are labor contracts … it’s a legal, binding contract.”

The health benefits, however, along with others, are being negotiated at the bargaining table with the employees' associations that represent workers and managers. City Manager Joe Tait said the open-ended negotiations will play a part in developing the city's fiscal-year budget, which will start July 1. In addition to medical benefits, city of San Juan Capistrano employees also receive tuition assistance, life and disability insurance and retirement benefits, among others.

"I think we’re all in agreement that the benefits package that public employees get is way out of whack and we have to try and pull it," said Freese. But "[we have to do so] without destroying morale."