The good news is that the village of North Riverside and the union that represents its police officers have come to terms on a new three-year contract. The bad news is that it took so long that both sides will have to begin negotiating a new deal almost immediately.
On Dec. 10, the North Riverside board voted to ratify the deal, which ends on April 30, 2013. Police had been working without a contract since the expiration of the previous deal on April 30, 2010.
“The village is a little disappointed that we were not able to reach an agreement on extending the terms of the agreement,” said Sue Scarpiniti, the village’s finance director. “After the first of the year, we’ll start negotiations on a new agreement.”
While the village was able to pry a significant concession from the police union regarding how its members pay for health insurance premiums, North Riverside was unable to bring the police union in line with firefighters and non-union employees with regard to post-employment health insurance benefits.
Retroactive to May 1, 2012, police officers are now required to pay 10 percent of the cost for health insurance premiums. Prior to that date, police officers paid a fixed amount. In 2011, for example, the contract called for them to pay $153.50 per month for health premiums.
“This change in methodology has been a position the village has been trying to advance for some time now,” said Scarpiniti.
The change means for the period after May 1, 2012, police officers will pay $235 more per year, per participant for health premiums, said Scarpiniti. And assuming that the same percentage-based formula will be used in future contracts, that amount will rise and fall depending on the cost of premiums. Under the terms of the old contract, police officers paid the same flat rate regardless of whether premiums held steady or rose dramatically.
In addition, the contract raises the co-pays for prescription drug coverage. In the prior contract, police officers paid a $3 co-pay for generic drugs and $6 for brand-name drugs. Under the new formula, the co-pay is $20 for generic drugs and $35 for brand-name drugs.
The old prescription drug co-pay structure drove up premiums, said Scarpiniti.
“This will incentivize employees to choose generic drugs,” she said.
However in this round of negotiations, police officers were able to hang onto a prize benefit — low-cost, lifetime post-employment health insurance.
Until 2011, this perk was available to all village employees. But the cost of funding such a program was enormous. In that year, the village mandated that all non-union employees hired after May 1, 2011 no longer qualified for the perk. The village also convinced firefighters to accept the change as well.
While the village will still be on the hook for paying the vast majority of health care premiums for its current employees for decades after they retire, eventually that cost will be phased out. At the time, Scarpiniti estimated that moving away from the post-employment health care perk would end up saving the village more than $1 million a year.
Police didn’t budge on the perk during the most recent negotiations although they did agree to change the way retirees’ contributions toward premiums would be calculated.
Any police officer who retires after May 1, 2012, will now pay the same percentage rate for premiums that he was paying on the final day of his employment. That percentage rate, however, will be capped at that amount. Any retirees prior to that day will continue to pay a flat rate for premiums.
The lifetime post-employment health insurance benefit also extends to any dependents on the plan at the time of the officer’s retirement.