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VOL. 131 | NO. 224 | Wednesday, November 9, 2016

Strickland Goes With Private Health Exchange for Retirees

By Bill Dries

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The city of Memphis is restoring a city subsidy for health care coverage of city retirees who are younger than 65 years old – primarily police and firefighters.

JIM STRICKLAND

Memphis Mayor Jim Strickland announced the private health insurance exchange for retirees Wednesday, Nov. 9, which includes Health Reimbursement Accounts funded by the city for eligible premiums and out-of-pocket expenses.

It reverses a city decision in 2014 approved by the city council to eliminate the city’s 70 percent subsidy.

The elimination of the subsidy was based on retirees 65 and older joining Medicare. But it left those younger than 65 facing premium hikes.

The council and then-mayor A C Wharton approved a temporary continuation of the pre-65 subsidy and alternatives beyond that temporary extension.

Strickland, who was on the council in 2014, said Wednesday he continued to talk with city employees about the issue after becoming mayor in January.

“They repeatedly told us that restoring a health insurance subsidy for pre-65 retirees would be a major step toward retaining employees, particularly in public safety,” Strickland said in a written statement. “I am committed to retaining employees, particularly public safety employees, and this is a major step in that direction.”

Leaders of the police and firefighters unions have pushed for a restoration of the subsidy and argue that the private exchange means higher deductibles, something Strickland has acknowledged. The HRA accounts are also a reimbursement of money retirees would have to find up front, which is another concern of the union leaders.

Rather than finding the money in the city budget for restoring the 70 percent subsidy, Strickland said the exchange and HRA addition gives retirees more options to tailor a plan to their individual needs.

“We want our current employees to know that if they retire younger than 65, this new approach ensures they will not be left in the dark,” Strickland said. “The private exchange is the only realistic option to save pre-65 subsidies.”

The city is currently in an open enrollment period for such benefits, with the benefits for most city retirees under the new plan taking effect in March.

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