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VOL. 129 | NO. 172 | Thursday, September 4, 2014

Council Aims at Moving Insurance Targets

By Bill Dries

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At just about every turn of the debate at City Hall about changes in health insurance coverage, Memphis City Council members have seen crucial numbers shift about the impact of the changes and the city’s liability.

With city employees and retirees about to get the individual details this month of the changes the council approved in June, council members are again taking a second look at critical numbers. It is an attempt to put the still-roiling controversy to rest by the open enrollment period that begins in October with changes that take effect in January. And it comes about two and a half months after the council approved the changes proposed by Memphis Mayor A C Wharton Jr.

This time, the second look is at conflicting numbers on the savings represented in an alternative health insurance plan presented by the Memphis Fire Fighters Association.

A presentation by citizens at a Tuesday, Sept. 2, committee session raised more questions for council members about the use of reserve funds in past fiscal years as health insurance claims have exceeded the amount budgeted in the plan for such changes.

A group of citizens who have combed city budget documents claim the numbers in their examination of the city’s budget for the current fiscal year and past fiscal years don’t add up and don’t balance.

Fran Triplett, one of the group’s members, added that the council is dealing with guesses in the budget it passed for the fiscal year that began July 1.

“We ask you to take a step back,” she said. “We’ve proven that this budget is not accurate.”

But any budget season decisions are made by the council – as well as the Shelby County Commission and Tennessee General Assembly – with the certain knowledge that the projections are estimates made toward a moving target that can change for many reasons.


“All of this is written in water, not stone, and it makes it difficult,” said council member Shea Flinn, who will lead the Sept. 10 special council committee meeting aimed at reconciling the numbers.

“It’s incredibly complex. We’re getting a lot of different information, and sometimes it goes one way and sometimes it goes the other,” he added. “Anytime you are dealing with projections into the future there’s a reasonable standard to them. But that has broad parameters. You can be reasonable down here and reasonable up here and produce wide variances.

Flinn said the council’s job is to parse the different estimates at the core of the discussion, each of which may come with political motives.

“There is sort of some bias reinforcement going on with which numbers people are choosing to use,” he said. “We’re trying to get to the closest objective reality.”

The union would restore benefits cut in the health insurance plan the council approved in June and instead raise the deductibles.

The conflicting numbers involve how much the city would save in that scenario.

The union and its actuary claim the plan would save the city of Memphis $24 million.

Mercer Global, a consultant to the Wharton administration, put the savings at $5 million to $12 million, with the higher amount dependent on everyone involved enrolling in the high-deductible plan, including those now in the city’s premier plan.

Cigna Health Care, the city’s insurance provider, puts the savings estimate at $17 million if half of those involved enrolled in the high-deductible plan.



“Cigna said they didn’t know how much the premiums would be, and then they bring up the fact that maybe not enough people would join the high-deductible plan,” council chairman Jim Strickland said. “We’re going to hear their thoughts on how to force that and if it’s possible. If it’s not possible, the savings are not there.”

Harold Collins is among the council members who want a last look by the actuaries before the council votes in October on the second half of the employee and retiree benefit changes – a vote on pension plan changes.

“We all recognized that we made the decision,” Collins said of the June vote on the health insurance changes. “We owe it to the 650,000 people and citizens and employees that work for us to do everything we can, down to the last minute if we have to, to ensure that we come up with a plan that everybody can be satisfied with.”

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