19-05-2025
Retired Lansing firefighters will see healthcare cost increase
LANSING, Mich. (WLNS) — City of Lansing retired fighters will see a significant increase in the cost-sharing portion of their healthcare.
The reason for the increase?
'H.R. [Human Resources] had been calculating their healthcare wrong,' Scott Bean, spokesman for the City of Lansing, tells 6 News in a phone call.
The erroneous calculations date back to a new collective bargaining agreement struck in 2013 under former Mayor Virg Bernero. The deal saw retirees contributing more for their healthcare as part of economic belt-tightening following the housing crash and subsequent financial crisis for municipalities.
'The Mayor was shocked to learn of this issue and is upset that the calculations were not properly implemented in 2013,' Bean wrote in a statement to 6 News. 'Labor staff identified this cost-sharing provision in the contracts with the IAFF [International Association of Fire Fighters] after the recent closure of an insurance provider. Under the law, now that this has been discovered, the City will be required to implement the contracts, as approved by the union and City Council. While this means cost sharing between retirees and the city going forward as required by the contract, under Mayor Schor's direction, the City will not move to recover these costs.'
Bean is referring to underbilling for cost sharing since 2013, but retirees will be on the hook for an increase to their cost-sharing portion starting July 1, 2025.
How much taxpayers have been improperly paying for retirees from the Lansing Fire Department is unclear. It could be millions of dollars, city council members say, their 'back of the envelope' math shows.
Council members say under the new Humana insurance and the bargaining agreement, retirees with the basic healthcare coverage will see their cost-sharing increase from no cost sharing a month to $500. Those with the so-called 'Cadillac' plans will see an increase of $700 in cost-sharing to about $900 a month.
City Council officials were briefed last week about the error, confirmed Lansing City Councilmember At-Large Peter Spadafore. He was on a trip to Japan and Korea when he was briefed.
Other council members who did not wish to be named in this reporting confirmed the briefing. They did not wish to be quoted because the implementation of collective bargaining agreements is in the purview of the administration, not a city council responsibility.
The error was discovered as Human Resources officials were preparing for the 2025-2026 budget, which is due for approval at Monday night's meeting of the council. The review of the payments related to firefighter retirements arose from a loss of the Physicians Health Plan as a provider.
PHP was taken over by U-M Health Plan when Michigan Medicine and the University of Michigan bought Sparrow Health Systems. In 2024, U-M Health Plan announced it was ceasing operations.
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