Who gets town medical coverage and stipends?

Four non-union town employees are currently affected by a town policy requiring non-union new hires to pay 25 percent of their health insurance premiums. The policy was adopted in February 2009, and became effective March 1, 2009. Only one of them has to do it because two chose not to take town medical coverage. They receive a stipend instead of coverage. The fourth employee is expected to take coverage when a 90-day new hire probationary period ends. Two members of the Town Board also receive stipends for not taking medical coverage.

There was a buzz in town last week about town medical benefits — and the stipends paid to employees when they decline them — after first-term Councilman Paul Shepherd raised questions about them at a Town Board work session. Mr. Shepherd at the time believed himself to be the first employee to be affected by the policy when he complained publicly that it was unfair to penalize non-union workers by making them pay more for their coverage than others.

The Reporter in its story on Mr. Shepherd’s mistake last week passed his error on to readers.

New employees who belong to two of the town’s three unions are also required to help pay for their health benefits. Only PBA members are not required to pay anything — something town officials have said needs to be negotiated.

Highway workers hired before 2005 don’t pay anything; those hired later but before 2011 pay 15 percent; a higher payment for those hired in 2011 or later is in negotiation. For CSEA workers, no contribution is required for those hired before 2007; those hired later pay 20 percent. The requirement for those hired in 2012 and later is in negotiation.

For non-union employees, those hired before September 1, 2004 pay nothing toward their premiums; those hired between that date and February 28, 2009, pay 15 percent. Those hired March 1, 2009 or later pay 25 percent.

STIPEND CALCULATIONS

Those who waive the right to be on the town policy receive a biweekly payment equal to 50 percent of what their premiums would have been. That payment is reduced if they were hired as of January 1, 2005 or later, in line with their contract agreements. An employee required to pay 25 percent of the premium, for example, would receive 50 percent of the premium minus 25 percent.

Two Town Board members — Supervisor Jim Dougherty and Councilman Ed Brown — currently receive stipends in lieu of insurance. The 2012 budget shows that Mr. Dougherty will receive $8,223 while saving taxpayers $7,970 over what it would have cost the town to provide him coverage, according to figures provided by his office. Mr. Brown will receive $5,240 and save the town $5,100 by not taking the plan. Councilwoman Chris Lewis and Councilman Peter Reich are covered by the town’s health insurance policy and neither pays any portion of the coverage because they began their town service before a contribution was required.For several years, Mr. Reich took a stipend but he opted in 2011 to be covered by the town policy.

Shelter Island used to provide coverage for life for employees after five years of service, according to former supervisor Art Williams. During his administration, that changed and now an employee must work 10 years before being vested, he said.

“The stipend actually saves the town money,” Mr. Reich said. The more employees who opt for the stipend instead of coverage, the less the town has to pay for insurance premiums.

Mr. Dougherty wrote in an email that he annually reviews the stipend incentive policy. He estimated that it has saved Shelter Island taxpayers more than $500,000 since its adoption.

“Anecdotally, I understand the 2001 Town Board investigated private businesses’ experience with the incentive stipend, including the South Ferry Company,” Mr. Dougherty said. “During this year’s process, I checked in with Cliff Clark of the South Ferry Company — South Ferry has had the program about 20 years — and he remains of the opinion the policy works well for the employees as well as for the company, saving it and, therefore, ferry users, considerable money over the period.

When I decided to offer my services to the town in 2007, I undertook it under the ground rules then prevailing, a 15-percent employee obligation, and implicitly and happily accepted the deal, notwithstanding my Town Board colleagues having, and continuing to have, no employee obligation,” he said.

For Mr. Shepherd, the stipend poses a problem. He has never had health coverage and has no plans to enroll in the town program. He maintains that he should be entitled to a stipend, nonetheless, and indicated last week he might seek legal counsel to wage that battle.