San Angelo's Human Resources Director Lisa Marley held a meeting on health insurance changes for employees and early retirees. Of the attendees, all but two were early retirees. Retired Police Chief Russell Smith raised ERRP, the Early Retiree Reinsurance Program. Marley said any monies would not be available until 2012 and that the Council would decide their use.
The timing and use are within the purview of the City Council today. City leaders agreed to pass 100% of cost increases to employees and early retirees. Mayor Alvin New stated there "was no new money." City Manager Harold Dominguez and HR's Veronica Sanchez hemmed and hawed when Smith raised ERRP at the November 16 Council meeting. The City will bank 19 months of ERRP's new money, before considering how to use the funds.
IPBTax.com's Employee Benefit Insider stated:
While reimbursements may be used to reduce either participant or employer costs, it is not clear whether at least some participant cost reduction is required. The preamble states that HHS “encourage[s]” employers to use reimbursements to offset both kinds of costs.
I believe the City wants to combine employer and early retiree health plans, allowable under ERRP. Given their firm stance of not sharing proceeds until 2012, I believe the City wants to use the funds to cover their portion of future health increases.
What's clear? The federal government gives, the City takes and not one early retiree gets a break in 2011. Who'd have thought such a thing could happen?
First Jacob, now Lisa. Add a link to the Marley chain.