Hundreds of retired Sonoma County government employees are expected to turn out today for what could be a heated confrontation over plans to require former workers to pay a bigger share of their health care costs.
For the first time, county administrators will detail proposed changes likely to result in many of the county's 2,400 retirees eventually paying a larger portion of their health insurance premium, particularly if they retired before reaching age 65 or if they also insure a spouse on their health plan.
"Some people are angry and some don't think they can fight the government," said Kathy Wertz, who retired from the county's risk management office three years ago at age 53. "We are at the point where we don't know what to do but to make a lot of noise."
County Human Resources Director Ann Goodrich acknowledged many retirees will be forced to pay an increasing share of premiums over time as medical costs continue to rise. But, she said, the county must take steps to reduce commitments to pay future medical premiums.
Retirees are the third major group of county workers to feel the pinch of rising health insurance costs coupled with a decreased willingness by government officials to commit future tax dollars to increasingly expensive benefit packages.
The county already has informed about 650 nonunion employees, mostly supervisors, that their health benefits will be similarly restructured beginning next June. And, during contract negotiations with the Service Employees International Union that represents 1,900 employees, the county has served notice that it intends to shift more health premium costs to them as well.
New accounting guidelines are forcing county officials to calculate future costs of employee and retiree benefits and detail how they'll make up deficits.
Some entities, such as the city of Rohnert Park and Santa Rosa schools, have tallied similar liabilities in the $20 million to $30 million range, but the county's commitment is huge by comparison. The county is the area's largest government employer, and it pays a large percentage of retiree, employee and dependent benefits, even past the time Medicare takes effect at age 65.
An independent study determined that the county has promised to pay $414 million in premium costs over the next 30 years. The study found the county is falling behind in saving money to pay those future costs because it is setting aside less than half of the $37 million needed annually.
"It has to do with controlling our medical costs and reducing our future liabilities to pay benefits," Goodrich said.
Currently, the county pays a retiree's and dependent's premium based on 85 percent of the lowest-cost health plan offered by the county.
Instead of paying a premium percentage, the county proposes paying a flat monthly rate of $500. It proposes to phase in this change by decreasing current payments by 20 percent annually until the $500 contribution is reached.
Goodrich said the county calculates that as many as 900 retirees will receive more money than now, especially those who insure no dependents.
"A five-year phase-in will allow most employees to get to age 65 when Medicare is able to help them with medical coverage," she said.
Carl Jackson, a retired Water Agency employee and a leader in the county Association of Retired Employees, said the group sent meeting notification letters to all 1,400 of its members.