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VOL. 129 | NO. 148 | Thursday, July 31, 2014

City Hall Saga Charts New Directions

By Bill Dries

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After a bit of a breather, all sides in City Hall’s simmering political dispute over health insurance changes for city employees and retirees sat down at the same table Tuesday, July 29, and offered a few new directions.

(Daily News File)

They are directions that could move the dispute beyond the stand off that has played out at City Council sessions for much of the summer with angry city workers packing council chambers. But there were indications at the Tuesday health care oversight committee session that the new directions will likely produce new disagreements.

The oversight committee includes city division directors as well as leaders of the municipal unions representing city workers and leaders of the Association of City Retired Employees.

The Memphis Fire Fighters Association proposed an alternative higher deductible health insurance plan.

And the administration of Memphis Mayor A C Wharton Jr. fleshed out its safety net fund for those city retirees and employees who fall between the cracks on coverage in the transition to the health care coverage cuts later this year. The administration also announced it will seek four separate requests for proposals for firms to manage the city’s health care, dental, vision and prescription drug plans.

Word of the RFPs to come prompted Memphis Police Association President Mike Williams to again criticize the administration for “putting the cart before the horse.”

“The city is trying to force this issue of doing away with health care,” he added. “And now we are going to privatize and outsource.”

City chief administrative officer George Little said the union proposal that Fire Fighters secretary treasurer Matthew Tomek claimed would save the city $25 million and restore the coverage cuts approved in June by the council “bears close scrutiny.”

But he warned that any alternative would have to accomplish several goals beyond reining in the city’s health care costs and liabilities, including contributing to the city’s unfunded pension liability. And Little said any changes could not reopen the city’s budget for the fiscal year that began July 1.

The council is scheduled to vote in October on city pension changes proposed by Wharton.

“The solution we come up with has to be a long-term sustainable solution. We don’t want to go through this again a few years down the road,” Little said. “We’re not talking about going back and amending the budget. … And I haven’t got any sense there’s an appetite on council’s part to do that. … This is really just the first big installment. We’ve got a lot more to do to get to where we need to be on pensions. That and debt service are going to require that we come up with additional savings.”

The first reaction from the administration to the firefighters’ plan sounded like an exchange from contract talks.

City human resources director Quintin Robinson said the plan’s higher deductibles “has elements brought to the committee a year and a half ago” by the administration but rejected by the unions.

“I’m glad to see there’s been a reversal,” he said to Tomek.

Tomek and other representatives of city employees said it wasn’t a reversal by them and that the administration had proposed higher health care deductibles without lowering the rate the city charged employees and retirees.

The proposal will be heard by council members in committee sessions either Sept. 2 or Sept. 16, said oversight committee chairman and council member Edmund Ford Jr.

Meanwhile, a city “trust fund” administered by a nonprofit foundation was detailed by Robinson to assist city employees and retirees who qualify with “out of pocket” costs in the transition to the health insurance changes. The fund already has commitments of up to $1 million as needed from Methodist Le Bonheur Healthcare, $500,000 from Cigna health care, and a similar pledge from Saint Francis Hospital. Robinson said Baptist Memorial Healthcare and Regional One Medical Center have pledged support “within the scope of services they offer.” A coalition of Saint Francis, Baptist and BlueCross BlueShield have offered “navigators” to help pre-65 city retirees enroll in health care coverage through the federal government’s health care exchange.

The plan also includes access for all city employees and retirees to a free health care clinic the city plans to open in Midtown.

Qualifications are to be based on income and family size with the city benefits office, the oversight committee and the City Council all voting on any draw from the fund.

“The actual account is being set up in such a way that it will be out there and transparent but we don’t need to go back to the budgeting process to utilize that particular mechanism,” Little said. “It won’t be for each individual draw. … All of that’s going to be done in a very public sort of way. We’ll report out balances. But our position is basically going to be hands off.”

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