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VOL. 129 | NO. 182 | Thursday, September 18, 2014

Door Remains Open on City Health Insurance Changes

By Bill Dries

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The political struggle to close the door and lock in changes to city health insurance coverage is proving to be a challenge for the Memphis City Council.

The council voted Tuesday, Sept. 16, to adjust the health insurance changes it approved in June to grandfather in for a year approximately 300 retirees and their spouses when it comes to the 70 percent subsidy on insurance premiums they currently get from the city.

And council members indicated they might delay an October vote on pension fund and benefit changes that are the second piece of the overhaul of city employee and retiree benefits.

Individual council members talked throughout the day Tuesday with union leaders and Memphis Mayor A C Wharton Jr.’s administration on the adjustment and the latest in a series of larger alternative plans presented by union leaders.


“This plan will work,” said a frustrated Thomas Malone, president of the Memphis Fire Fighters Association. “And it works for everybody and we can get the hell out of this insurance business. I’m sick of it.”

So council member Janis Fullilove proposed and the council unanimously approved a resolution directing the administration to review the proposal, which appears to be a variation on the high-deductible plan the unions advanced earlier. But it uses administration numbers and presumptions in its calculations.

Some city employees and retirees at City Hall Tuesday applauded the unanimous vote, not realizing it left intact most of the changes Wharton proposed and the council approved in June. It is merely a directive for Wharton and his staff to review the alternative that would restore most, if not all, of the health insurance cuts and changes that are set to take effect without further council action.


Council chairman Jim Strickland said it’s hard to tell if the council is closer to ending the debate over alternatives.

“It all depends on the details of another health care proposal,” he said, referring to the union alternative. “To be honest with you, we haven’t begun any review on it. The proponents of the plan say it’s a wash moneywise. Whether it is or not is to be seen. … I hope it’s a wash. I hope that it doesn’t cost any more money. But as they say, the devil is in the details.”

And the details in which dollars figures in the tens of millions are multiplied, divided, added and subtracted in head calculations around a table are taking a toll on the patience of all involved.

Council member Harold Collins believes the council is being led astray by the figures and qualifications on those figures by the administration.

“I believe that this council is treading down a path of misinformation, calculated risk, and you all stand by what your vote was on June 17th,” he said to council members who voted for the broader set of health insurance changes.

The council voted Tuesday to make some changes for retirees under the age of 65 who have no other coverage outside federal health insurance exchanges. The changes preserve coverage for those retirees and their spouses at least through 2015.

City Chief Administrative Officer George Little said the administration would find the money in the city budget to fund what is estimated at a $3 million expense to make the change and continue the subsidy for those retirees.

The council also approved, after delaying it for several meetings, a $2 million safety net funded by pledges from Cigna, the city’s health insurer, and the Methodist Le Bonheur Healthcare Foundation to assist employees and retirees who might fall between the cracks in the transition in health care coverage. That fund has no time limit or expiration on it.

The administration at one point referred to it as a “trust fund” that didn’t require council approval and before that had a very different definition as a fund to assist the city in explaining the health insurance changes.

Meanwhile, council members indicated Tuesday there will be a move to delay an Oct. 7 council vote on pension plan changes. Strickland said the council will not have heard from its actuary consultant by the Oct. 7 meeting.

The pension changes are the second piece of an overhaul of city benefits after actuaries told city leaders the pension liability and health insurance liability are unsustainable without changes. Some savings from the health insurance changes would go to fund the pension liability.

MORTGAGES 54 374 1,120
BUILDING PERMITS 177 767 2,425