Bitter Chill Aimed at San Angelo's Early Retirees

The City of San Angelo faces a political blue norther.  City Council promised to pass 100% of health insurance increases to employees and early retirees at the November 16 Council meeting.  Mayor Alvin New stated there "is no new money," despite the City's qualifying for Early Retiree Reinsurance Program (ERRP) funding on August 31.  When challenged by Retired Police Chief Russell Smith, City leaders' lips froze.  Council will revisit the topic December 7, agenda item #10:

a. Authorizing the City to make the appropriate premium adjustments approved by City Council for January 1, 2011 through December 31, 2011 plan year with Blue Cross/Blue Shield and The Hartford

b. Authorizing the City to discontinue health and prescription coverage for employees/retirees who fail to satisfy monthly premium payments and who are in arrears in excess of sixty (60) days

c. Authorizing the City Manager to execute related contract agreement regarding the January 1, 2011 through December 31, 2011 plan year renewal with Blue Cross/Blue Shield of Texas

(Presentation by Human Resources Director Lisa Marley)

Given the intense public comment during the last meeting, one could expect more information in the packet.  One might expect an explanation of ERRP, its projected funding and intended use.  Hardly, the packet included one memo:

Date: 12/2/10
To: Mayor and Councilmembers
From: Lisa E. Marley, Director of Human Resources
Subject: Agenda Item for December 7, 2010 Council Meeting
Contact: Lisa E. Marley, Director of Human Resources, (325) 657-4221
Caption: Regular Item
Consideration of the following items related to Health Benefits (items a-c listed above):

Summary: At the November 16, 2010 City Council meeting, staff was instructed to meet with
employees to review the health insurance. On December 1, 2, and 3, 2010, a total of four meetings were held. Staff has several options for premium adjustments for the 2011 plan year as well as a recommendation on making necessary plan changes for employees/retirees who fail to satisfy monthly premium payments.

History: In July 2009, RFP# HR 02-09 was issued for proposals on health insurance benefits and RFP# HR 01-10 for pharmacy benefits. With council approval, the City elected coverage
through Blue Cross / Blue Shield of Texas for the 2009 plan year, with subsequent renewals
for three years.
History on item B – The City currently drops employees/retirees who fail to pay monthly premiums from their current plan to the Employee/Retiree Low coverage plan, primarily because the low coverage plan is at no cost to the employee/retiree and further past due premiums will no longer accumulate. The City then goes through the process of collecting past due premiums, many times unsuccessfully, while claims under the low coverage plan continue to be paid by the City.
Financial Impact: Please refer to presentation.
Other Information/Recommendation: There will be no recommended benefit changes to the current low, medium and high health plan coverage. Recommendations will be strictly for premium adjustments.
Additionally, it is recommended that the City drop health and prescription coverage for members that fail to satisfy monthly premiums payments and how are in arrears in excess of 60 days.
Attachments: None.
Reviewed by Service Area Director: Lisa E. Marley, Director of Human Resources, 12/2/10.

San Angelo will bank 19 months of ERRP funding before considering any break to early retirees.  Will Christmas 2011 be as cold?

Retirees had to wonder why Council had the resources to approve a new holiday, Veterans Day, but not a penny for increased medical costs.  What will the next North wind bring those on a fixed income?  So far, it's not honesty or complete information on federal funds for early retirees.  God bless us, everyone!"