We evaluate and compare Healthcare benefits and Retirement Healthcare benefits between municipal police departments in the Capital Region.
This article continues our evaluation of the compensation earned by various police departments in the capital region.
Previously, we evaluated total salary defined as (Base Pay + Holiday Pay + Longevity Bonus + Shift Differential Pay) between the police departments in Saratoga Springs, Schenectady, Glens Falls, Glenville and Colonie.
Our analysis found that under the terms of the newly proposed contract, an SSPD officers will be the highest paid in the region.
Today, we will look at another form of compensation, healthcare and retirement healthcare benefits.
For the purpose of our analysis we will continue to evaluate a Patrol Officer with 10 years of service time and assume that they are receiving family medical benefits while working. We also assume that the average cost of a family plan = $20,000/yr.
The Saratoga Springs PBA contract states that a police officer pays 15% or $1500 (whichever is less) into their healthcare benefits. Meaning that the monetary value of the SSPD patrol officers healthcare benefits = $18,500.
But how does this benefit compare to other departments?
A Patrol Officer with 10 years of service time in Saratoga Springs pays approximately $500 less into their benefit package than in the comparator departments.
However its important to note that in the case of Schenectady PD, healthcare benefit contribution rates are dependent on years of service. With the newest employees paying as much as 20% into their healthcare benefits until the ninth year on the job.
Finally, lets add the annualized value of the healthcare benefits to the total salary for our Patrol Officer with 10 years experience.
*Total compensation is defined as Total Salary + Healthcare benefits
A patrol officer with 10 years of service time working Shift 3 will earn $116,443 per year not including overtime pay, retirement healthcare benefits and pension.
That is about ~6% more compensation that the same patrol officer working in Schenectady, ~8% more than a patrol officer's base pay in Colonie, ~18% more than Glenville and ~28% more than Glens Falls.
Retirement Healthcare:
We will continue our analysis by looking at another form of compensation; retirement healthcare.
Retirement healthcare is broken down into two buckets, pre-Medicare eligible health benefits and post-Medicare eligible health benefits.
In NYS municipal police officers are allowed to retire with just 20 years of service time. Therefore theoretically a police officer could start the job at age 25 and retire at 45.
For our analysis we will continue to examine a Patrol Officer with 10 years of experience who has family health insurance and assume this officer retires at age 45 and lives until age 75.
Pre-Medicare Eligible Retirement Healthcare Benefits:
Retired police officers in each municipality receive the same healthcare plan in retirement as they had when they were working on the job.
The coverage amount, timing, total value and employee contribution vary between municipalities.
For example, Saratoga Springs, Schenectady and Glens Falls cover the retired individual, spouse and dependent children from the moment the employee retires.
Glenville, on the other hand, only covers the individual and requires the retired former employee to pay 100% of the additional premium for a spouse and/or dependent children. Glenville is also the only department that limits coverage for the individual to age 50 and older.
Retired police officers in Colonie are required to pay 25% into their family retiree healthcare benefit. That is significantly greater than Schenectady and Saratoga who both require the retiree to contribute 10% or 15% of the annual cost of care (In the case of Saratoga its actually 15% or $1000 maximum, whichever is less).
Glens Falls police officers have the most robust coverage in retirement with the municipality paying 100% of the cost of healthcare for the individual and family.
Post-Medicare Eligible Retirement Healthcare Benefits:
At age 65, individuals living in the United States become eligible for Medicare.
For doctor visits Medicare only covers 80% of the cost of care, and zero for prescription drugs, so many individuals will purchase a supplemental or Medicare advantage plan to pick up the cost of prescription drugs and the remaining cost of doctors visits.
Only Glens Falls, Schenectady and Saratoga provide healthcare benefits to Medicare eligible retirees and their spouse.
Glenville and Colonie do not provide benefits to any retired employee once they become eligible for Medicare.
Schenectady provides the most robust benefit, as their contract demands that the city purchase the same insurance the person had during pre-medicare eligible retirement (HMO/PPO plan). This type of plan costs significantly more than a Medicare Advantage plan.
Saratoga Springs and Glens Falls offer their Medicare eligible retirees a Medicare advantage plan. For Glens Falls, that plan is covered at 100% by the municipality. In Saratoga Springs, retired police officers are required to pay 15% of the cost of the plan.
Saratoga Springs Medicare eligible retirees receive the MVP Medicare Preferred Gold Plan which costs ~$1680/yr per covered person.
Total Cost of Retiree Healthcare:
Using our assumptions, Patrol Officer 10 years of service, family medical benefit, retirees at 45 and lives to 75 we determined the total cost of retiree healthcare earned in each municipality. We then amortized that benefit over the 20 year career of the officer to determine the annual compensation this benefit added for our hypothetical patrol officer.
Glens Falls has the most generous retirement healthcare benefits pre-Medicare eligibility with a 20 year cost of ~$400,000 for a family plan. Saratoga Springs ranks second with a total cost of $380,000 for a family plan.
As the retiree ages into Medicare eligibility, Schenectady provides the most robust healthcare plan, with a total cost of $108,000. However it is important to note that this difference is driven largely by the municipality being contractually obligated to offer the same insurance coverage as the retiree had when working.
Saratoga Springs ranks third in the benefit given to retired employees when eligible for Medicare at a total estimated cost of $28,560 over 10 years.
When we annualize the retiree healthcare benefit both in pre and post Medicare situations we determine that the benefit provides annualized additional compensation of $20,428 for the Patrol Officer working in Saratoga Springs. $23,400 for Schenectady, $21,680 for Glens Falls, $15,000 in Colonie and $12,750 in Glenville.
Finally, when we add together Total Salary, Healthcare Benefits and Retirement Healthcare benefits we find that our 10 year Patrol Officer, working shift 3, with family medical, who retires at age 45 and lives until 75 earns ~$136,871/yr in total compensation while on the job.
It is important to remember that total compensation as we have defined it does not include over time pay, pension, or additional benefits of monetary value.
Saratoga Springs Police Officers remain the highest paid in the region even when considering healthcare and retirement healthcare benefits.
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