financial audit by CFO Michael Dane and accounting firm Armstrong Backus. I found a few items curious from the year ended September 20, 2011.
First, health insurance provided over $1 million in cash from operating activities. Over $250,000 was invested, leaving a nearly $750,000 increase in cash, bringing the total to $967,000. The statement does not show whether the $250,000 investment is obligated to employee/retiree health insurance or if it can be used anywhere.
This extra million came from the city imposing draconian premium increases on employee and retiree dependents. Their health insurance premiums rose from 36 to 58%. City Council chose not to apply any ERRP funds to break the hardship. As a result nearly 200 people dropped city sponsored health insurance.
Ironically, this Council meeting has a 2012-2013 budget amendment for $343,000 in ERRP funds, buried in item #15. Might it take three years for early retirees to benefit from federal money intended to make health coverage more affordable?.
Also odd about the audit report, the city claims it is 100% responsible for health insurance risk. The city has reinsurance that shifts a portion of that risk to an insurance company. Also employees and retirees share in both risk and premiums. The city paid 70% and employees 30% of premiums during the audited fiscal year.
A review of the document reminded me of the City's stepped up efforts to hide over $1.1 million in 2011-2012 health insurance savings Nearly a year after Council approved an exclusive provider arrangement with Aetna using Community Medical Center, they executed a last minute budget amendment which purported to have equal offset.
I'll have to wait another year for Armstrong Backus to report what actually happened.