GENESEE COUNTY— Faced with a mounting depletion of funds, the Genesee County Board of Commissioners has hired a consulting firm to review the county’s retiree healthcare plan.
In an October letter to county retirees, Genesee County Board Chairman Ted Henry indicated that Plante Moran has been selected to provide a costsavings plan for the county and to analyze healthcare options that are currently being offered to retirees. He said that the review is necessary because the county will eventually run out of savings unless changes are made to its retiree healthcare system.
According to Henry, the county is spending $1.4 million a month toward retiree healthcare and a $160,000 a week on average for retirees’ prescription drug plans. To cover retiree healthcare costs, the county board has moved to spend around $11 million from its fund balance for the 2020 fiscal year.
“While that may be OK on a one-time basis, continuing to dip into our savings is not sustainable long term,” Henry said. “On our current path, the county will run out of savings by 2023.”
Josh Freeman, the Genesee County Board and Capital Projects Coordinator, said that rising employee healthcare costs and decreasing revenues have been the biggest contributors to the county’s depletion of funds.
“Since the financial crisis in 2008, our revenues have not kept pace with costs,” he said. “We also have to pay extra to maintain the same level of benefits a retiree may have had in, say, 1995, although their healthcare provider may not carry that plan today.”
Currently, Genesee County maintains over 20 healthcare plans for its retiree groups.
In addition to hiring Plante Moran, the county board has also met with experts from Michigan State University to better understand mandated vs. nonmandated services and to learn what the state constitution requires for funding levels.
“We must do this to survive financially,” Henry said. “Not one Commissioner wants the State of Michigan to come in and dictate how we should run our government.”
In his letter to retirees, Henry said that the county is prioritizing many cost-saving options, including a plan to save on prescription drugs—which cost the county more than $8 million a year.
Henry said he expects Plante Moran to finish its review by the end of the year.
“Once Plante Moran provides their findings to the Board, we will share them on our various social media sites, websites and via email so (the public and retirees) can review the information at the same time as the Board,” he said.
The county board adopted a $113.7 million budget on Sept. 25 for the current fiscal year, which started on Oct. 1. Within the budget is a spending plan that provides for one out of every three dollars to be spent toward fringe benefits for current and retired county workers.