University Place City Council debates restoring its health insurance

University Place City Council members are debating whether to offer health care to themselves.

Cost and whether the city is legally obligated to offer insurance to elected officials has dominated the discussion so far.

Preliminary estimates show it could cost the city about $100,000 if the majority of the City Council and their spouses are covered.

But city staff members caution that numerous variables affecting cost are at play.

“It could vary from everything from the council paying 100 percent of the cost to participate, or it could be they pay zero percent,” said Eric Faison, assistant city manager for administrative services and finance director.

“It could be just for them, or for them and their families,” Faison said.

The council discontinued its health care in December 2010 after having insurance for eight years. At the time the plan was more expensive than what was available to nonunion employees.

Council members also had the option to take a cash payout instead of coverage.

Budget constraints drove the decision to end the plan.

New to the City Council in 2010, Caroline Belleci supported eliminating health insurance. Six years later her position hasn’t changed.

“I feel as an elected official you’re serving in a capacity that is giving back to your community, not taking from your community,” she said in a phone interview last week.

“I’m open to finding a solution that might help those that currently do not have benefits through an employer, but I am not willing to allow the city to incur the cost for that.”

The city’s budget issues have not gone away since 2010, Belleci said.

The council has repeatedly said it won’t pay for recreational youth and senior programs in 2017. It also has a projected $600,000 gap in the upcoming budget cycle, Belleci said.

Offering health care at a potential cost of $100,000 does not make financial sense, she said.

Councilman Chris Nye has a different opinion.

He believes council members are employees of the city, which means that under the Affordable Care Act the city must provide health insurance or be penalized.

A self-employed business owner, Nye said he is familiar with requirements of the Affordable Care Act.

Nye is covered by his wife’s employer plan. If the city offered health insurance, he said, he would compare plans and chose the best option for his family.

He said his support for council health care isn’t about finding a better plan, but about being compliant with the law.

To back up his argument, Nye notes that federal taxes are withheld from council members’ monthly pay, W-2 tax forms are issued each year and that council members have city employee identification numbers.

City Attorney Steve Victor disagrees.

“My position is it’s not required,” he said. “Until something changes from the feds, elected officials are not considered employees under the Affordable Care Act.”

Looking to other cities for guidance is futile, Victor said. Lakewood doesn’t offer health insurance to its part-time council members, while the cities of Puyallup and Tacoma do.

“There is no uniform standard,” Victor said. “It’s a legislative policy decision.”

The insurance debate resurfaced in University Place because plans have changed and some council members requested a review.

Councilman Ken Grassi supports council insurance.

A small business owner, Grassi said the individual coverage under his insurance plan is “absolutely horrible.”

Grassi said he is open to the idea of coverage being available to council members only and not to their families.

“Although it may appear self-serving, that’s not the intent,” Grassi said. “It’s important for all of us to maintain the best health that we can to be able to do the best job we can in serving the community.”

The city’s insurance is provided through the Association of Washington Cities trust. If the council restores its health care, the association requires at least four council members enroll for coverage to be available.

No date has been set for the council to vote on the issue.

This story was originally published February 5, 2016 at 8:24 AM with the headline "University Place City Council debates restoring its health insurance."