SOUTH PORTLAND — Starting next year, South Portland city councilors will no longer receive taxpayer-funded health insurance as part of their compensation.

Councilors will be able to buy health insurance through the city, at their own expense.

The council voted 5-2 Wednesday to eliminate taxpayer-funded insurance plans beginning Nov. 30, 2013. Councilors Rosemarie De Angelis and Tom Coward opposed the change.

Since 1977, city councilors have had an option to get health insurance from the city, in addition to the $3,000 annual stipend outlined in the city charter. Some residents and councilors have complained that the option creates inequity because not all councilors receive the benefit.

South Portland is one of the only cities in Maine that’s known to include councilors in employee health plans, according to the city’s staff.

The city now pays more than $36,000 a year for councilors’ health insurance. If all councilors had family plans, the cost would be more than $100,000.

Stipends and health insurance for councilors represent 0.2 percent of the city’s $28.5 million municipal budget. The average homeowner in South Portland pays $3.13 a year for council representation, according to city officials.

Councilors Maxine Beecher and Gerard Jalbert have single policies, paid in full by the city. Councilors Coward and Tom Blake have family policies, for which the city pays 80 percent of the cost.

Councilors De Angelis and Alan Livingston and Mayor Patti Smith do not have health insurance through the city.

In November, the city sought advice from William Plouffe, an attorney, on whether providing health insurance to city councilors in addition to the $3,000 stipend complies with the city charter. Plouffe concluded that providing the stipend and health benefits exceeds the compensation limit in the charter.

In August, the council discussed eliminating the insurance option and agreed to look for a way to phase out the current arrangement. It was the council’s first public discussion of health insurance since a resident, Albert DeMillo, dropped a lawsuit against the city over the issue.

Coward said Thursday that the council’s vote was “bad for the city and it’s bad for the citizens.”

“We need to attract more and better people to run for council,” he said. “To the extent that we remove existing incentives, we make it less likely to get good candidates.”

Coward said he thinks the vote to eliminate insurance was premature, and should have been held after the council took a closer look at compensation for councilors.

De Angelis said she couldn’t compromise to support a proposal that continued paying for health insurance “for another minute.”

“This is not a phase-out, it’s highway robbery,” she said during the meeting.

Staff Writer Gillian Graham can be contacted at 791-6315 or at:

ggraham@mainetoday.com

Twitter: grahamgillian