DULUTH — A record number of Duluth firefighters retired in December, fearing growing health insurance costs as the city projects double-digit increases for its employees.
Eleven department employees retired at the end of the year, 15 in all of 2021, totaling 10{6f90f2fe98827f97fd05e0011472e53c8890931f9d0d5714295052b72b9b5161} of the workforce. Most of them, a union president said, retired earlier than planned to preserve their current health insurance coverage.
The uncertainty “forced a ton of people off the job,” said Adam Casillas, president of Local 101, the Duluth Professional Firefighters Union. “There was less security in staying on, and for firefighters, health insurance is critical.”
The city announced last fall that its health insurance costs would dramatically increase, at least 17{6f90f2fe98827f97fd05e0011472e53c8890931f9d0d5714295052b72b9b5161} in 2023, and then 10{6f90f2fe98827f97fd05e0011472e53c8890931f9d0d5714295052b72b9b5161} annually, based on employee demographics, historical claims and industry trends. Under those projections, the city would face a nearly $5 million deficit in 2023, increasing thereafter. The city’s health plan provider is expected to offer actual renewal rates in June.
How the deficit will be addressed isn’t 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 surge of Fire Department retirements comes at a time when Duluth and other Minnesota cities are struggling to fill ranks. It led in January to 12 new trainees, the largest recruiting class in decades for the department of 140.
Rick Grondahl retired in December, just shy of 31 years with the Fire Department, 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 by retiring before the union’s current contract expired, it would hopefully lock in his health insurance plan, he said, although he knows it could be disputed by the city.
“These are things you are counting on,” he said of expected health care coverage upon retirement. “Health care is a big concern, as you leave 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 lead to workers delaying care or only seeking it for emergencies, Casillas said.
The potential coverage change comes at a time of soaring fire calls, with 17,894 in 2021. That’s about a thousand more than the year before and a 15{6f90f2fe98827f97fd05e0011472e53c8890931f9d0d5714295052b72b9b5161} increase since 2016.
Duluth’s population remains stagnant, Casillas said, but fire call volumes continue to grow.
“The city has received more federal dollars than we’ve ever seen,” he said, referring to COVID relief money, “and they didn’t put any of it back into employees. … It shows they don’t prioritize employees and families. And we’re the face of the city of Duluth.”
The city’s health insurance plan hasn’t changed since 2007, said Finance Director Jennifer Carlson, but the plan’s annual cost per employee has increased 10{6f90f2fe98827f97fd05e0011472e53c8890931f9d0d5714295052b72b9b5161} yearly with the exception of 2020. Medical procedure and specialty drug costs also continue to grow, she said. The city’s 2022 budget includes $27 million in medical insurance costs for both active and retired employees. All city employees are covered under the same health care plan.
The fire union of 132 members is working under a contract that expired at the end of 2021 and has not yet begun negotiations with the city.
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