City Council updates healthcare costs and announces 2.5% pay raise for employees

The City Council of Clarksville held a special work session on June 12, 2025, focusing on updates to employee health benefits and compensation structures. The meeting addressed the city's ongoing efforts to manage health plan costs while ensuring employee contributions remain manageable.

The discussion began with an overview of the city's self-insurance program, which has successfully controlled costs and premiums for employees. However, for the first time since 2017, the city announced it would need to pass on a portion of increased health care costs to employees. In 2024, employees faced a 5% increase in their contributions, with the city absorbing 7.5% of the rate increase. For 2025, the city plans to increase its contribution to health and pharmacy costs by 10%, amounting to $117 per month for each employee. Employees will see a modest increase in their contributions, effective January 1, 2026, ranging from $2 to $12 per month, depending on their selected plan.

Additionally, the city will continue to cover the full costs of the on-site clinic for employees and their families, eliminating a previous $5 monthly fee. The total monthly cost for health, pharmacy, and clinic services provided by the city is $13.79 per employee.

The meeting also covered the city's pension plan, which remains a defined benefit plan under the Tennessee Consolidated Retirement System (TCRS). For employees hired before July 1, 2023, the city covers 100% of pension costs, while those hired after that date contribute 5%. The actuarial valuation for the retirement plan indicated that contribution rates would remain unchanged this year.

In terms of employee compensation, a 2.5% general wage increase was recommended for all non-probationary employees who meet performance expectations. This increase will take effect on June 28, 2025, to align with the unique pay schedules of law enforcement and fire protection employees, avoiding complications with overtime calculations.

To assist employees in understanding the impact of these changes, the city has developed a pay and benefit calculator available on its website. This tool will help employees assess how the wage increase and health care costs will affect their overall compensation.

In summary, the meeting highlighted the city's commitment to balancing employee benefits with fiscal responsibility, ensuring that while costs are managed, employees receive fair compensation and support for their health care needs.