Council Committee Puts Off Recommendations on Health Insurance Alternatives

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VOL. 129 | NO. 177 | Thursday, September 11, 2014

When Memphis City Council members meet Tuesday, Sept. 16, they will still be considering alternatives to the health care insurance plan changes they approved in June.

And they will probably still be trying to make sense of a mind-numbing array of conflicting numbers.

That was the bottom line after a three-and-a-half hour special committee session Wednesday at City Hall that drew four of the 13 council members initially but slimmed down to two members for the last part of the session.

The committee session was to reconcile conflicting numbers among the city's actuary firm and the city's health care provider on how much in savings a plan by the Memphis Fire Fighters Association would produce. It was also for the council to sort out what families of some city employees claimed were inconsistencies in their review of the city's budget and health care fund.

Council members Shea Flinn and Wanda Halbert will take Halbert's call for an independent audit of the health care fund to the full council next week with no recommendation from them.

The Mercer Global representative and a representative from Cigna Health Care reconciled their differing estimates of savings in the fire union plan at $12 million at the most compared to the $24 million the union's leaders initially estimated.

Mercer and Global experts were working on different assumptions in terms of net numbers and gross numbers and had also accounted for other factors in their separate calculations in different ways, they said.

Meanwhile, fire union president Thomas Malone has an alternative plan ready but questioned whether he should present it with so few council members present Wednesday only to do it again for the full council in less than a week.

Then Mike Lee, president of the Association of City Retired Employees - ACRE - outlined another plan that he did not have a savings calculation on that Mercer and Cigna representatives will review.

The administration of Memphis Mayor A C Wharton Jr. has become more insistent in the last week that the council call an end to the review of the alternatives and vote them up or down. The administration is citing the coming open enrollment period for health care benefits under the new terms that begins in October.

City finance director Brian Collins termed the criticisms and claims about the city budget 'gross inaccuracies' with revised dollar figures that are 'unreliable.'

'It's not an improper financial statement. It's just complex,' Collins said of claims by the group that the city's financial statements don't reflect accurate dollar figures.

He was particularly critical of the group's point that the city is not required to pay all of its OPEB - other post employment benefits - liability.

While that's true, Collins said he anticipates the Tennessee legislature is very likely to pass a new law soon requiring that just as it has required the city to fully fund its pension liability in five fiscal years.

'To say this is something we do not have to do is simply wrong-headed,' Collins said.