By KELSEY SWANEKAMP
Buffalo Law Journal

Elma Town Supervisor Michael Nolan is making an example of himself.

When he took the post six years ago, Elma used four different health-care providers to cover its public employees, who didn't pay a dime toward their coverage.

A self-professed believer in leading by example, Nolan set out to streamline the town's health-care coverage and save money.

Elma currently spends $389,426 on health insurance for town employees. Only about 40 of 68 are eligible for the insurance. The others are part-time or seasonal employees.

"For the first time ever in the Town of Elma, every employee who receives health-care insurance contributes toward their health-care insurance, even the union (members)," Nolan said.

Since Jan. 1, all town employees have contributed 10 percent of the cost of their insurance premiums.

"Our goal is to be in line with the private sector," he said.

Turning over some financial responsibility to town employees began at the top: Elected officials were the first to chip in for health-care coverage.

"It was saying, ‘If it's good enough for us, it's good enough for you,' " said Nolan. According to the 2008 budget, the town supervisor's salary is about $60,000.

Formerly the owner of Subway franchises, he carried over what he learned in his business background to the world of government.

"I always found that when I worked with people directly, when I was willing to do something before them, they would always be willing to do it after me," Nolan said. "So it was basically a sell that said, ‘Listen: This is a partnership, and you're going to have to contribute toward health insurance.' "

The December negotiations with Teamsters Local 264, in which Nolan participated, went smoothly and lasted about six hours.

"There was no way we were going to settle the contract without their contribution," said Dennis Powers, a town councilman who also was involved in the negotiations. "It was going to happen. They pretty much knew it."

Still, some conciliations were made, including a pay raise to union employees.

Town employees can save up unused sick time to cash in for payment toward health insurance once they retire. During negotiations, the town offered more time to employees to use toward this payment.

"There was very little that we had to give up to get this," Powers said.

Some people, though, had to give up a lot.

Wayne Clark, highway superintendent for Elma, wasn't involved in the negotiations, but he - like all town employees - had to chip in for his insurance.

"If someone took $800 or $900 away from you every year, would it change your household budget?" Clark said. According to the 2008 budget, Clark's yearly salary clocks in at just under $53,000.

According to Nolan, Elma has an advantage over other municipalities because it never offered lifetime benefits to employees, calling the practice a "backbreaker for governments."

The Village of Akron has a similar plan in place, with employees contributing a portion of their health-care costs.

Only full-time employees are eligible for health-care coverage, said Village Clerk Daniel Borchert. As a result of recent union negotiations, employees hired after June 1, 2003, contribute 15 percent toward their health insurance.

In Akron, too, negotiations went without major bumps.

"Everybody understands the problems with health care," Borchert said. "Everyone thought it was fair."

Sydnee Shephard, a clerk in Akron and the union steward for Teamsters Local 264, said that while the cut in benefits wasn't a welcome adjustment, she understood why it was necessary.

"Times are changing. We realize that," she said.

Co-pays for eye-care visits have increased, in addition to the standard required contribution.

Shephard added that union members are "grateful" for the health coverage that they do have. "We don't take it for granted, and we don't abuse it," she said.

When the current contract expires in 2011, the village will look for even greater contributions from its employees, Borchert said.

Erie County is struggling to come to similar arrangements with its eight employees' unions.

Currently, the county offers fully paid health insurance to employees in CSEA, the Civil Service Employees Association, and fully paid insurance to retirees up until age 65, when they transfer to Medicare.

Family members of county employees are covered under the CSEA health care plan, and there is no limit on the number of family members covered and no additional contribution for covering family members.

Currently, the county provides coverage for more than 10,000 "lives," including the dependents of employees.

The county spends $125 million on health-care coverage each year, with an average monthly cost of $1,100 per employee. County Personnel Commissioner John Greenan said County Executive Chris Collins wants a contribution from employees to be negotiated as soon as possible.

He added that Collins believes the current benefits are "excessive."

"The current rate is just not sustainable," Greenan said.

The county has already reached a new contract with the New York State Nurses Association (NYSNA), which features an employee contribution - 15 percent of annual growth for existing employees and 15 percent of the premium for new employees.

"It's important that employees have some skin in the game," Greenan said.

To help decrease the expense of the existing health-care plan, the county created the Labor-Management Healthcare Coalition - a combination of government agencies, such as the NFTA, and small municipalities, such as Orchard Park - which purchases medical insurance in a cooperative to receive a lower rate.

"We bring our buying power together," Greenan said.

John Orlando is president of AFSCME Local 1095 and a member of the coalition's board of directors. He said the county also achieves savings by cutting out the broker fee, usually about 4 percent.

"Instead of being dictated to by insurance companies, we dictate to them," he said.

While the negotiations are a give-and-take, the county is willing to let the union contracts expire until a compromise can be reached that includes an employee contribution. In this case, the expired contract terms would hold until a new contract is settled, but employees will not receive any pay raises until that time.

While Greenan is hopeful the contracts will be negotiated soon, Elma Town Supervisor Nolan underlines the impossibility of continuing lifetime benefits.

"You better get that under control as quickly as possible," he said.