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Falls Offering City Workers $9K to Opt Out of Health Plan | News

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Falls Offering City Workers $9K to Opt Out of Health Plan
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BUFFALO, N.Y. -- It's no secret that, often times, government employees end up with a pretty good health insurance plan.

Apparently, the health plan in one local city is so good and so expensive the city is paying some of its workers thousands of dollars a year just to keep them from joining the plan.

Even some of the elected leaders there are cashing in.

For some workers in the city of Niagara Falls, it's a lot like getting a $9,000 bonus every year just for choosing to get their health insurance through a spouse or someone else, instead of taking the city plan.

The health insurance "opt-out" program predates the tenure of Mayor Paul Dyster, who said his hands are somewhat tied.

REPORTER: Isn't $9,000 a little bit much to offer as an incentive to opt out of health insurance?

DYSTER: Yeah. I think everyone agrees that $9,000 is probably too much, but it's what's in the contract.

Right now, Niagara Falls spends $18,000 for every employee on its city health plan. The opt-out program gives half of the savings back to the workers who opt out. Dyster estimates the city still saves $420,000 a year.

But you wonder whether they could be saving a lot more. The city of Buffalo gives $1,200 a year to city workers who opt out of its plan.

Falls workers are getting more than seven times that amount.

Among those pocketing the $9,000 each year is Council Chairman Sam Fruscione, who opts of the plan offered to council members in favor of the one he receives as a public school teacher.

He says the program, overall, is a win for taxpayers.

REPORTER: But do you really need to offer $9,000?

FRUSCIONE: Well, I can't offer any. The mayor is the only person. Let's clarify this. The mayor is the only person that can negotiate the benefits or take away the benefits.

REPORTER: If you think $9,000 is a lot, why did you take the opt out?

FRUSCIONE: Because I didn't want to waste the taxpayer's money and take an $18,000 health benefit package. That's why I took it. So I had two choices. It was either opt out or (inaudible). They say I had no choice in between.

REPORTER: Could you just not take the nine grand?

FRUSCIONE: No. They would have instantly gave me the benefits.

We asked Fruscione if he would consider donating the $9,000 back to the city. He said "no," adding that he ends up spending a large portion of the pay-out on helping his constituents.

Mayor Dyster said, during the last contract, he was able to get the unions to start paying for part of their health care and accept less than the traditional three-percent annual pay increase.

REPORTER: Is this something the next time the contract comes up -- is this something that you will try to negotiate out?

DYSTER: Yeah, I mean it was on our list of things we were looking at this time, but again, we had to pick what it was we thought we could accomplish. This wasn't the item that was most important to us in terms of our bottom line.

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