Saturday, November 16, 2013

City Sponsored Health Insurance: One, Two Punch

San Angelo's City Council will address employee/retiree health insurance in their November 19 and December 3 meetings.  On November 19 Council will consider a budget increase of $201,288 for health insurance for 2013-14.  That will occur in public session inside a massive budget amendment.

The second item on November 19 will occur in Executive Session.  Council will discuss a "contemplated settlement offer to ACAP Health for clinical care engineering services for the City health insurance program."  ACAP's David Toomey slithered into the October 15 Council meeting to ask for payment.

This raised questions about Assistant City Manager/CFO Michael Dane's performance for the third time.

1)  The Furniture Fiasco had the city spending over $100,000 on Water Department furniture without Council approval.  
2)  Council asked for invoices on the West Texas Water Partnership after the initial amount exceeded $100,000.  That did not happen until the tally was much higher.    
3)  Council approved the concept of shared savings on health insurance with ACAP Health, but staff never executed the contract, i.e never negotiated the arrangement thus there was nothing for council to approve.  ACAP's President wants council to pay his firm $500,000.  

Dane was Interim City Manager at the time of the Furniture Fiasco and for a large portion of the other two events.

It's galling to think that $500,000 of the city's health insurance fund balance could go to a consultant instead of to employees/retirees and their dependents.  The City plans to add $201,288 to the already approved 2013-14 health insurance budget.  The background packet detail shows this will be funded by the city's remaining ERRP dollars.

Over three years ago the federal government approved the City of San Angelo for participation in the Early Retiree Reinsurance Program (ERRP).   Human Resource Director Lisa Marley stated in the Standard Times:

“It will either be a better (health insurance) benefit or their premiums can be lowered.” 

City leadership reneged on that initial promise.  It's neither a better benefit, nor have premiums been lowered (relative to plans that existed when the city applied).  Mayor New, City Manager Harold Dominguez et al squandered their opportunity to use ERRP funds to lessen draconian health insurance increases that drove nearly 200 people from city sponsored coverage.

The City sat on the bulk of ERRP money.  In September 2012 Council voted to use funds in the only manner prohibited by a single federal standard, that federal money not replace local funds.

The clock ticks on ERRP, given its January 1, 2014 program shutdown.  It's not clear the City will meet their promise in time.  San Angelo is near the end of our ERRP saga.

Any ERRP funds returned to the federal government and any settlement monies paid to ACAP Health are a shared responsibility between Mayor New, Councilman Hirshfeld, City Council and paid staff.  Those funds should be used toward employees/retirees. 

That's the topic on December 3 for City Council, health insurance for the 2014 calendar year.  There should be few changes given it's an extension of a current contract.  The question is who pays?

Update 11-30-13:  Regarding ACAP Health, City Council minutes state "Motion, regarding the contemplated settlement offer to ACAP Health for clinical care engineering services for the City health insurance program, to acknowledge Council does not have a sufficient basis or sufficient information to make or reach any decision on the matter, was made by Councilmember Farmer and seconded by Councilmember Silvas. Motion carried unanimously."  Interestingly, Councilwoman Farmer seconded the motion to engage ACAP Health in May 2012, which also carried unanimously.

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