The Henderson City Council is considering ending a retirement health care subsidy program used by many city employees that officials say is financially unsustainable and to move them to an existing health savings account program.
Public hearings on amendments to labor agreements with the Henderson Police Officers Association, the Henderson Police Supervisors Association and Henderson Professional Firefighters Local 1883 are scheduled to take place at Tuesday’s City Council meeting, according to an agenda posted online. A council vote on the amendments to the Joint Benefits Agreements will follow the presentations, a city spokesperson said on Monday.
If the amended Joint Benefits Agreements are ratified, the city will begin transitioning employees in those unions, as well as non-represented employees, away from a benefit program called Retiree Health Insurance Premium Assistance, or RHIPA, in favor of enhanced Retirement Health Savings, or RHS accounts, according to documents attached to Tuesday’s agenda.
Established in 2014, RHIPA provides retirees participating in the city’s self-insured health plan with a monthly subsidy of $200 to $400, depending on their years of service, according to a June 16 letter from the city’s labor negotiators to the unions.
Employees initially contributed $15 to $20 per paycheck to RHIPA, according to the letter. The plan was amended in 2019 and again in 2023, increasing the contribution to $24.20 per paycheck for all employees. Contributions are set to automatically increase 10 percent every five years, beginning in 2029.
Under RHIPA, employees do not have individual accounts. Instead, they contribute to and receive benefits from a shared fund, according to a city FAQ. The city also contributes a yearly lump sum of $330,000 and is set to increase that contribution by another 10 percent beginning in 2034, according to the June 16 letter.
‘Somebody was going to get hurt in this’
Even with increased contributions from employees and the city, the increasing number of retirees and expected increases in health care costs could require the city to spend $5 million to $7.5 million annually to keep RHIPA solvent in future years, according to the city.
Henderson Police Department Lt. Charles Hedrick, president of the Henderson Police Supervisors Association, said city negotiators showed several projections for extending RHIPA’s life, but each showed the program eventually becoming unsustainable.
Hedrick said in a phone interview Thursday that the HPSA consulted with experts outside of the city’s negotiating team and agreed with the city’s assessment. He said transitioning away from RHIPA now is in the best interest of his members.
“We had to look at this from a perspective that somebody was going to get hurt in this, with RHIPA,” Hedrick said, adding that more than 80 percent of the union’s members supported changing the Joint Benefits Agreement. “If we continue the program, we know it’s going to run out of money. And we owe it to our members. That’s who I represent … Continuing a program that we know is going to fail is not in their best interest.”
Former Henderson Fire Department Capt. William Rotroff, who retired in April 2025 after 29 years with the department, said he learned about the proposed transition about two weeks ago and has been alerting fellow Henderson retirees about the possible change.
Rotroff said in a phone interview Monday that while he understands the city has a fiduciary obligation to spend taxpayer money wisely, he feels that retirees who were promised the benefit should be made whole. He added that the unions and the city should have done more to notify affected retirees sooner.
“It’s truly gut-wrenching,” Rotroff said. “When you find that the city that you worked so hard for and dedicated so much of your time for, whether it’s missing out on birthdays or baseball games or special events in your life, so that you can take care of your city and the community, that they can turn around and not even tell you, not even warn you it’s coming, it’s disheartening.”
Rotroff said he plans to speak at Tuesday’s council meeting.
Information sessions planned
The city said RHIPA funds will be transitioned into individual RHS accounts, which can be used for eligible healthcare expenses in retirement.
According to the June 16 letter to the unions, employees will receive a lump sum based on their tenure, reduced by any RHIPA benefit they have already received. An employee with 25 years of service or more will receive 100 percent of their contribution; those with 20 to 25 years of service will get 80 percent; those with 15 to 20 years of experience will get 65 percent and anyone with 10 to 15 years of experience will be given 30 percent of their total contribution.
RHIPA recipients also will have a three-month grace period to receive their final subsidy payments.
Online informational sessions are being held Monday from 6 to 7 p.m. and Tuesday from 8 to 9 a.m. for affected retirees to ask questions and provide feedback, the city said.
Hedrick said he understands why retirees are upset, but he called the change necessary to protect early and mid-career employees who likely wouldn’t benefit from the RHIPA program.
“We were trying to be as fair as possible to those that were close to retirement,” Hedrick said. “Our thought process in this was how do we resolve this as fair as possible for everyone?”
Contact Casey Harrison at charrison@reviewjournal.com. Follow @Casey_Harrison1 on X.
