San Angelo's Early Retiree Reimbursement Program application states the intended use of federal funds:
Reimbursement through ERRP will allow the City "to continue to provide the same quality of care without passing on additional costs to its participants."
This flies in the face of the City's plans to pass 100% of health insurance cost increases to employees and early retirees for 2011. While citing "no new money," the city will effectively bank 80% of ERRP reimbursement.
The full ERRP application is below, for those interested:
PIR - APrest
City Council plans to act on this item December 7. Anyone wanting to impact this decision should contact their City Council representative ASAP.
Thanks to San Angelo's Public Information Officer Ty Meighan for this document.
Update 11-29-10: Section E1 is missing from the above document. It's not clear if the City failed to fill it out or if something got lost along the way. I sent a follow-up e-mail to Ty, requesting this portion of the application.
E. *Intended Use of Early Retiree Reinsurance Program Reimbursements
1) Please summarize how your organization will use the reimbursement under the Early Retiree Reinsurance Program to reduce health benefit or health benefit premium costs for the sponsor of the employment-based plan (i.e., to offset increases in such costs); reduce premium contributions, copayments, deductibles, coinsurance, or other out-of-pocket costs (or combination of these) for plan participants; or reduce a combination of any of these costs (whether offsetting increases in sponsor costs or offsetting or reducing plan participants’ costs). If necessary to provide a complete response, the sponsor may submit additional pages as an attachment to the application. Please reference such attachment in this space.
Update 1-12-11: HHS responded to my FOI request. They received the City's application on July 14, 2010. The City stated in response to the above E.1 request:
The City of San Angelo is self-insured for health coverage. Early Retiree Reinsurance Program Reimbursement proceeds will be deposited in a dedicated account for insurance funds. These funds will then be used to offset increases in premium contributions and increases in participant costs.