DULUTH — A record number of Duluth firefighters retired in December, fearing rising health insurance costs as the city plans double-digit increases for its employees.
Eleven employees of the department retired at the end of the year, 15 for the whole of 2021, i.e. 10% of the workforce. Most of them, said a union president, retired earlier than planned to preserve their current health insurance coverage.
The uncertainty “has forced a ton of people out of their jobs,” said Adam Casillas, president of Local 101, Duluth’s union of professional firefighters. “There was less safety to stay, and for firefighters, health insurance is essential.”
The city announced last fall that its health insurance costs would rise significantly, by at least 17% in 2023 and then 10% annually, depending on employee demographics, historical claims and industry trends. . According to these projections, the city would face a deficit of nearly $5 million in 2023, increasing thereafter. The city’s health plan provider is expected to offer actual renewal rates in June.
How the deficit will be handled is not yet known.
Mayor Emily Larson will make recommendations for the city’s 2023 budget that will be balanced and sustainable, said Noah Schuchman, chief administrative officer.
The wave of firefighter retirements comes at a time when Duluth and other Minnesota cities are struggling to fill the ranks. It led in January to 12 new interns, the largest promotion in decades for the department of 140.
Rick Grondahl retired in December after 31 years with the fire service, most recently as a fire equipment operator. He was proud to work for the city, he said, and his father and wife also retired from the department.
Grondahl said that retiring before the expiration of the current union contract would hopefully freeze his health insurance plan, he said, although he knows this could be disputed by the city.
“These are things you rely on,” he said of expected health care coverage in retirement. “Health care is a big concern, because you’re leaving this (type of) job.”
Firefighters face a higher risk of cancer diagnoses and cancer-related deaths, according to the Centers for Disease Control and Prevention, and 1 in 5 suffer from post-traumatic stress disorder. High-deductible plans can cause workers to delay care or seek it only in an emergency, Casillas said.
The potential change in coverage comes at a time when fire calls are skyrocketing, with 17,894 in 2021. That’s about a thousand more than the year before and a 15% increase since 2016.
Duluth’s population remains stagnant, Casillas said, but fire call volumes continue to grow.
“The city got more federal dollars than we’ve ever seen,” he said, referring to COVID relief money, “and they haven’t put any back into employees. … It shows that they don’t put employees and families first, and we are the face of the city of Duluth.
The city’s health insurance plan hasn’t changed since 2007, said chief financial officer Jennifer Carlson, but the plan’s annual cost per employee has increased 10% per year, with the exception of 2020. The costs medical procedures and specialty medications also continue to rise, she said. The city’s 2022 budget includes $27 million in medical insurance costs for active and retired employees. All municipal employees are covered by the same health care plan.
The 132-member firefighters union is working under a contract that expired at the end of 2021 and has yet to enter negotiations with the city.