Additionally, many firefighters retire in their late 40s or early 50s, meaning they are about 15 years away from qualifying for Medicaid.
"Until then, they’re ours,” Sipe said.
Anticipating more expenses for retiree insurance in the future, trustees have added a $20 monthly fee to the insurance premiums paid by members and made "prudent” investments to raise the $8 million set aside so far for retiree insurance, Sipe said.
The goal is to eventually earn enough money to cover retiree liabilities.
"Right now, our trust is difficult in that it covers both actives and retireds. That’s the problem with it,” Sipe said.
Fire union members are the only city employees not on the city’s insurance plan. The union requested the arrangement, and in 2003 its members began receiving insurance through the trust.
Six of the seven trustees are current or former union members, according to the trust agreement.
The city funds the trust, and trustees buy and administer insurance for covered members.
City payments to the trust this past fiscal year were $9,500 each for active or retired firefighters under age 65 and $3,500 for retirees over 65. Fire department retirees over 65 typically use Medicare as their primary health insurance coverage, although they get the same insurance through the trust as other retirees, Sipe said.
The payment amount is based on the average amount the city pays for insurance for other employees, said Colin Fonda, benefits manager for Oklahoma City.
The money can only be used for insurance.
Fonda, the trust’s only nonunion member, said the trust is run well, but that there are "too many variables” involved to determine whether it has been a good deal.
Other unions not interested
Sipe said the firefighters’ insurance arrangement has worked well because it puts firefighters in charge of their own insurance and takes administrative work and liabilities away from the city.
Other union leaders called it risky and cited the liability shortfall as one reason why.
"It’s probably not economically sound,” said Gil Hensley, president of Fraternal Order of Police Lodge 123.
Another union president said the city benefits from its large employee base when buying insurance.
"The more people that are covered, the better rate you receive,” said William Bryles, president of American Federation of State, County and Municipal Employees Local 2406.
The Oklahoman’s Watchdog Team: Looking out for you. Visit NewsOK.com/watchdog.