Disability claims dig into city budget

While Cloquet finance director Nancy Klassen painted a mostly positive picture of the city’s financial position last week, one number in particular stood out: a $3.2 million actuarially determined increase in the city’s long-term public safety expense, to cover ongoing and future insurance benefits for former police officers on disability.

The issue is complicated because it involves actions by both the State of Minnesota and the Public Employees Retirement Association (PERA) which resulted in the city’s obligations. There is nothing the city can do on its own to limit those added costs, Klassen said, because it is state law.

First enacted more than 20 years ago, State Statute 299A.465 requires the employer of any officer or firefighter disabled in the line of duty to continue to provide health coverage for the officer or firefighter and their dependents under the employer’s group health plan until the officer reaches the age of 65.

Approved disability payments come from PERA, the public employees pension fund. But the former employer must cover their portion of the health insurance premiums as if the individual were still on active duty.

Klassen has no beef with the state statute: it answered a need. “The statute was intended to protect employees that were injured in the line of duty and couldn’t work at all,” she said.

The unanticipated change — the one that blew up the city’s previous estimate of its post-retirement benefit obligations and doubled workers’ compensation costs last year — went into effect in 2019, after state legislators passed a new law. The law states that that if a public safety employee is diagnosed with post-traumatic stress disorder, it is presumed to be due to the nature of the employment. The diagnosis can relate both to workers’ compensation and/or disability pension. First responders in the state have been allowed to apply for workers’ compensation for PTSD since 2013.

Over the next year-and-a-half after the law change, a total of six Cloquet police officers left or retired on PERA disability, Cloquet human resources director James Barclay told the Pine Knot News in an August 2020 response to a data request. He didn’t say what kind of disability. Data privacy laws mean the city cannot say why employees leave employment unless they are dismissed for disciplinary reasons. Regular retirees aren’t eligible for continued employee insurance.

According to a Pine Knot story on police numbers written in November 2019, the majority of those departures came in the first 10 months of 2019, the first year the PTSD law was in effect. Since August 2020, one more person has left the police department and still gets insurance benefits through the city, bringing the total number to seven.

Normally, the annual rate of disability retirement is close to about 1 per 100 employees, PERA executive director Doug Anderson told the Pine Knot News in 2020. Cloquet is far above that average.

Cloquet isn’t the only law enforcement agency locally or across the state that lost a higher number of officers to disability claims in recent years. The Carlton County Sheriff’s Office, Cloquet Area Fire District and Moose Lake police were all affected, although those numbers were not available before the Pine Knot News went to press this week.

Metro forces also saw losses. In July 2020, Twin Cities area attorney Ron Meuser Jr. told WCCO television that more than 150 Minneapolis police officers — nearly 20 percent of the force — had begun the process of filing disability claims, with most saying they’re suffering from PTSD. Remember that 2020 was the year George Floyd was killed in Minneapolis, and as well as the onset of the Covid-19 pandemic.

Need is there

Mental health is indisputably an issue for some law enforcement, firefighters and EMTs, who respond to situations many people who don’t work in public safety or health care may never face, Carlton County Sheriff Kelly Lake explained in a 2019 interview with the Pine Knot.

“When I started, you didn’t talk about officers’ mental health. It was part of the job, you just dealt with it. … We’ve learned that’s not healthy,” she said.

Lake pointed out that 2018 was the third year in a row police suicides outnumbered line-of-duty deaths. Her department dealt with the death of one of its own deputies by suicide in 2016.

The sheriff said PTSD can be cumulative. “It may not be one particular event, but over the course of a career, you respond to babies that are dying, seeing teenagers who are overdosing, stabbings and shootings … how many of those events can you see? It has to have an effect on people. Just because we wear the badge does not mean that we can shut off all emotion when we respond to these scenes. We deliver death notifications, you might have to tell a mother her son has died, or a wife that her husband is dead.”

And everyone is different, she said. Things don’t impact every officer the same way.

“Sometimes with mental health issues, it’s actually a normal reaction to being exposed to a very ‘un-normal’ situation,” said Rob Boe, a former police officer who works as public safety project coordinator for the League of Minnesota Cities Insurance Trust.

Genereau stressed that it’s not the county’s job to evaluate whether a disability claim is valid — that’s in the hands of PERA. “Could it be abused? Absolutely,” he said. “There’s any number of people that will take advantage of whatever. And that’s a challenge for PERA to deal with. The sheriff and I cannot sit here and say, ‘We think we have x number of employees who are pursuing it for legitimate reasons and x number of employees who are pursuing it for illegitimate reasons, that’s not a call for us to make.’”

“I will tell you it’s more than just a doctor’s slip,” Lake said, referring to PERA’s process for determining disability due to PTSD. “It is much more than that.”

A CAFD firefighter, who asked to remain anonymous, said mental health has been a problem for firefighters for a long time. “In the past you covered it up by drinking or being miserable,” he said. “Look at the divorce rates in these professions: some of those come from the way you can change from all those experiences on the job, especially without talking about it.”

According to the International Association of Firefighters Recovery Center, firefighters and paramedics are twice as likely to suffer PTSD as the general population. The Recovery Center offers coping strategies, individual and group therapy sessions and activities to help members recover, build resilience and return to the job.

A column by Dr. John Violanti in the “Community Policing Dispatch” referred to an estimate that approximately 15 percent of officers in the U.S. experience PTSD symptoms.

“We are hoping our research will help develop methods to deal with the problem of PTSD among police,” he wrote. “Of course, the best way to deal with this problem is primary prevention of PTSD before, rather than after, it develops in officers. Techniques such as trauma inoculation training, trauma awareness, and proactive assessments are needed.”

County coordinator Genereau said the county tries to address mental health issues, offering an employee assistance program which can provide counseling for a group or individually, plus the sheriff’s department has its chaplains. The Cloquet PD is proactive with debriefings and counseling opportunities after traumatic incidents as well, such as the standoff that ended when the suspect shot and killed himself earlier this month.

Unintended costs

Was there pent-up demand for mental health disability claims versus physical disability claims? The numbers seem to indicate there were. After the initial rush, the exodus locally appears to have slowed, as the Cloquet police department slowly builds back up to full employment, losing just one more employee after 2019.

So the legislative action has helped career public safety employees with PTSD get treatment or retire on disability as intended, but it’s also hurt their former employers in the pocketbook.

The city of Cloquet now must budget an additional $105,495 a year to cover the insurance payments for the seven disabled officers. The $3.2 million figure presumes ongoing payments for all of the former employees until they’re 65.

If the increase were simply added onto the city budget, it would require a tax levy increase of roughly 3 percent for insurance payments alone. That hasn’t happened, Klassen said, because the city has found other things to cut, and additional revenues have helped make up the shortfall, including a LGA (local government aid) increase in 2020 from the state.

Soon to retire, Klassen said she hopes the state will do something to help decrease the financial impact to cities and counties. The state did that with the Enbridge tax refunds during the most recent legislative session.

“I’m sure all cities and counties are hoping they (the state) will either come up with more funding, or reimburse us or they’ll change the statute to be something a little less taxing on the taxpayers,” she said.