City Council Stiffs Employees Yet Again on Health Insurance

San Angelo City workers and retirees must be tired of the beating from this City Council on health insurance.  Last year this mendacious crew forced the lion's share of $960,000 in 2011 cost increases on employees, early retirees and their dependents.  Workers bore 76% of the total $1.2 million in projected increases.

At the time key City leaders knew of a projected $550,000 in federal Early Retiree Reimbursement Program (ERRP) funds, but chose to keep it secret.  When challenged by Russell Smith and myself, elected leaders sat on their ERRP, passing draconian premium increases for dependent coverage.

As predicted, scores of city workers/retirees dropped health insurance.  Nearly 200 fell from the rolls of the insured, saving the city $190,000 in 2011.   Council never mentioned these savings in a public meeting.

The city has $1.15 million to put to bear on health insurance.  Here's the breakdown:

1) $190,000 savings from city workers and retirees dropping health insurance for 2011. (Unless they already spent it on something else)

2) $480,000 in ERRP money, of which $330,000 from 2010 early retiree claims sits in a city bank account.  (This can only be spent on health insurance, reducing premiums or increasing benefits)

3) Expected savings of $483,000 from Aetna plan with SACMC EPO for 2012.

Council met today to talk about using these funds.  City leaders reneged on their prior intent to use ERRP funds in 2012, instead sticking them in a rainy day fund with earliest use in 2013.

Fast forward to 2012 where Council plans to pocket most of any $673,000 in elective savings.   The City plans to return a mere $197,000 (29%) to employees/retirees, keeping 71% for the city's "plan fund balance, which at nearly $1 million is about $400,000 short of its 75-day goal."

Is the "plan fund balance" for health insurance or capital budget items?  I would bet the latter, given Harold Dominguez's propensity to hide things with obtuse language.  Here's how fair this council has been to employees/retirees:

Increased costs:

76% employees/retirees

24% city

Cost savings:

29% employees/retirees

71% city

The city dishes out three of four lashes to workers/retirees, then takes three of their four potential prizes.  Those who make the rules win the game.

Angelo State's "Bad Tooth" Nursing Program

The headline ran "ASU Nursing degree may be extracted."  The story went on to detail poor student performance on the Registered Nurse exam for ASU's associate degree RN students.  Passing rates plummeted in 2010 and 2011, according to university officials.  This occurred after ASU received a grant expanding its nursing programs.  One could conclude the university lowered its admissions criteria to increase enrollment.

To address the poor test performance ASU added an entrance exam and raised admissions standards"

"We elevated the admission criteria, the minimum ACT score and GPA (grade-point average)," said Susan Wilkinson, head of the Department of Nursing and Rehabilitation Sciences.

ASU's  AD RN program has 192 students.  When the AD program is pulled, students will need to get a Bachelors of Science in Nursing.

Nursing is one of ASU's "programs of distinction."  Expansion came with negative side effects.  What lessons carry over to the wider ASU "grow at all costs" mentality?

Quality problems are the last thing Angelo State needs as it heads into SACS accreditation, when the university is already on dicey grounds. It'd likely be better if the Texas Tech board axed the program than an accrediting body.  Appearances matter, even when quality doesn't.

Update 12-14-11:  The Texas Tech Board of Regents will take up the extraction issue.

Update 2-13-12:  ASU's Associate Degree RN passing rate fell to 60% in 2011.  Quantity does not mean quality.

Absent City Workers Heard Anyway

San Angelo City Manager Harold Dominguez devised a net-less tight rope for city workers on his Employee insurance Review Committee.  They had but one thin line to walk, given City Council's secret charge to spend no new money on health insurance.

The committee received this charge in early 2011, the public not until a June City Council meeting.  "No new money" was reinforced in summer budget meetings, despite concerns by members of the public. 

Early retirees, the ongoing after thought of this council, were added in September to evaluate bids.  This group suffered greatly from Council's December 2010 decision to pass draconian premium increases to employee/retiree dependents.  Nearly 200 people fell from the rolls of the insured, a savings of nearly $200,000 for 2011.

Harold thought he'd boxed the committee in enough to where he could delegate any employee/retiree ill will to them, while claiming credit for budget wins.  Not so.  Steve Wilson showed employees wouldn't take the latest "crap sandwich" from this council lying down.  In return for over 700 employees and retirees having to find new primary care doctors and specialists, the committee strongly requested council give the $483,000 savings (above "no new money") back to employees and retirees:

1.  Reduce premiums for employees and retirees low plan back to zero
2.  Equalize dependent coverage between employees and retirees
3.  Reduce dependent premiums 

Addressing Mayor New's concern for a rainy day fund, Wilson suggested ERRP funds could serve that role.  Harold's secret slush fund of federal money is now in the public eye, The City received $330,000 in ERRP funds and has another $150,000 on the way.

One might expect large numbers of employees at such a meeting.  Making over 700 workers switch doctors seems as important as the city employee health clinic, which had standing room only in 2010.  Why the no shows?

Employees were informed one full work day before that council would address the issue.  Anyone wishing to attend was required to take vacation time. I'd guess Harold issued an edict for managers not to approve such requests, but maybe he's not that evil.

Kudos to Harold's Employee Insurance Review Committee for not swallowing all the castor oil.  It was subtle, but I appreciate spitting some of it back in their face.

A big razzy to elected leaders for the ongoing torture inflicted on city workers and retirees.  When HR staff pass out Medicaid and CHIP applications to workers, something's terribly wrong.

Especially when that Council has over $1 million in health insurance savings to use, over $500,000 of that in cash.

Update 11-7-11:  City kicks retired 73 year old firefighter

COSA Drops Shannon, Which Will Drop ?

The City of San Angelo will drop Shannon Medical Center from its health insurance plan beginning January 1, 2012.  Of over 1,100 insured city employees, 70% currently use Shannon doctors and hospital services.  That means 770 must change doctors, primary care physicians and specialists, within 45 days or pay drastically higher out-of-pocket costs for out-of-network care.

The new plan will save the city $483,000 from the current plan.   How else did coverage change in the new plan?  The City didn't say or the Standard Times didn't report, but consider HR Manager's position on increases earlier this year:

Marley said renewal under the current plan design would require a 35% increase, 24% relative to the existing plan and 11% due to health reform requirements.  

What other coverage changes were needed to take a $2.5 million increase and turn it into a nearly $500,000 savings?  That $3 million swing likely required more than a single provider change. 

The other issue is what the city is doing with banked health insurance savings, over $1 million so far:

$190,000 from 192 people dropping health insurance in 2011.
$500,000 in expected Early Retiree Reimbursement Program funds
Some portion of $483,000 in savings from Aetna-Community move

The City didn't say who would file future ERRP claims, as the job is currently contracted to Blue Cross/Blue Shield.  This City Council proved inept in mobilizing ERRP money to help retirees keep affordable health insurance, especially in light of last year's position by city leaders:

One looming question after Tuesday’s extensive city health insurance plan debate — the topic took up much of Tuesday’s City Council meeting — was whether reimbursements from the Early Retiree Reinsurance Program were included in the plan’s $1 million cost increase.

The answer is no, and will likely remain that way until the end of 2011, when the city is discussing its health insurance plan for 2012.

The end of 2011 came and went.  The 2012 health insurance discussion went as I predicted, fast and furious with barely an effected employee in sight.  Who has vacation time to use to get stone-eared leaders to listen?  What happened to management by wandering around?  It became management by stomping on.

As for Shannon, the system will have 770 fewer patients to help cover the burden of the uninsured.  The City's move hurts the Mayor's chances of getting Shannon to contribute payments in lieu of taxes (PILOT funds). It may eventually hurt the area's employment picture as Shannon absorbs a $2.5 million hit from the city, along with another $2 million from Medicaid.  Shannon's UPL and DSH funds from the state and feds will be cut.  It's unknown how much. 

Will tax payments become a future requirement to bid on COSA health insurance?  One thing's for sure, as Shannon is pressed, life will be harder for the area's uninsureds.  The dumping is merely passed on.

COSA's Hollow Health Insurance Promises

Memo dated October 27, 2011 to Mayor Alvin New and San Angelo City Council members:

"At the December 7, 2010 Council meeting where the premium adjustments were approved for calendar year 2011, there was discussion regarding a concerted effort to involve employees and retirees in the process for 2012 rates."  -  City Human Resources/Risk Management Director Lisa Marley

Four days before Council meets on November 1, the public and employees received notice health insurance for 2012 was on the agenda.  The public had to go to the City's web site and pull up the agenda, which lists health insurance as item #11, after an Executive/Closed Session.  Employees received an e-mail, informing them health insurance would be the first item on the agenda.

Having offered public comment numerous times on health insurance, I would not have shown up at 9:15 am,the time given to employees.  In my mind the City released documents within hours of one another, guiding people to appear at what could be viewed as vastly different times.  Will one group be shortchanged?  Will it be the citizens of San Angelo, supposedly at the top of COSA's organizational chart or employees, required to take vacation to appear and comment?

Here's the heading of the e-mail.  Note the date and time:

Friday, October 28, 2011 2:14 PM
Subject: Fwd: For City-Wide Distribution: New Insurance

Authorized for distribution by the City Manager's Office.

TO: All Employees
(Supervisors: Please print for those employees without email.)

How many employees got the e-mail before leaving work Friday, especially those without e-mail?  How long does it take to process a vacation request?  Are there limits on how many employees can be on vacation at one time?

Council promised to do better on this contentious issue.  More than once leaders said they would involve retirees in the process, an apparent lick and a promise.   

“A lick and a promise” means “a superficial effort made without care or enthusiasm.” To perform a task with “a lick and a promise” is to do the absolute minimum required, and often far less than that. 

Retirees were involved only at the last moment, much like the City's distributing the agenda, agenda packet and employee e-mail.

Major changes are afoot, given the city's plans to spend no new money on health insurance.  One provider will be chosen, Shannon or Community.  Benefits may fall.  Retirees and employees may have to find new primary care doctors and specialists in short order.  While the city surveyed employees on possible changes, it did not include early retirees, once again casting doubt on Council's "concerted effort."

There will be no time to conduct research on options, mobilize city retirees or the general public.  November 1 is decision day, given benefit enrollment is planned the week before Thanksgiving, November 14.  Council won't meet again until November 15.  The COSA health insurance train is gaining steam, ready to achieve ramming speed.  How many employees and retirees will be tossed about this Tuesday?

It's different than casting out 192 covered employees, retirees and dependents, Council's 2010 achievement.  Early retirees have to wonder when the City's promise of "lower premiums or better benefit" will come true.  San Angelo delivers retiree licks better than promises.

Those wishing to read the e-mail can do so below:

COSA HI Emp Letter

City Health Insurance: Month Late & Dollar Short?

San Angelo Human Resources and Risk Management Director Lisa Marley will present health insurance bids to City Council this Tuesday.  The City's health insurance Request for Proposal HR-02-11, originally specified a council presentation on October 4.  Besides being a month late, the city plans to spend no new money on health insurance in 2012.  Agenda item #11 states:

a. Discussion of proposals submitted for Request for Proposal HR-02-11 for benefits regarding health, dental, vision, basic life/AD&D, voluntary life/AD&D, post-65 retiree health and flexible spending accounts.

b. Consideration of selecting Benefit Providers related to Request for Proposal HR-02-11 and authorizing staff to negotiate a contract, and authorizing the City Manager to execute said contract and any related documents

As the City budgeted no new money for health insurance, bidders had to be creative.  How much did they slash coverage levels?  How much will the City shift in annual medical costs to employees (out-of-pocket)?

Given the city's obtuseness on the Early Retiree Reinsurance Program (ERRP), I don't expect leaders to come clean on such matters.  With Retired Police Chief Russell Smith busy writing a book, someone will have to delve into the details to get the complete picture.  I helped Russell with research in the past, but am severely time constrained for the next month.

Here's my wish:  Lisa Marley would answer questions Russell or I would normally offer.  Russell might ask for the third year in a row, "What's the real agenda here?  C'mon, fess up."  One might expect the city to offer a clear motivation to San Angelo citizens, especially given COSA's organizational chart.

Is Mayor New encouraging more retirees to return to the workforce to garner affordable health insurance for dependents?  Is he using health insurance to get Shannon to provide payments in lieu of taxes, known as PILOT money?

Who will be impacted by decreased coverage levels, by how much?  How many employees will need to change primary care doctors and specialists, once the city picks a side, Shannon or Community, in our divided healthcare town?  How fast will they need to find that new doctor given open enrollment is slated for the week before Thanksgiving?

Will early retirees ever see Marley's 2010 promise of "lower premiums or better benefits"?  Since the city qualified for ERRP, early retirees paid through the nose for dependent coverage in 2011 and face benefit cuts in 2012.

Despite the city's "concerted effort to involve employees and retirees in the process for 2012," retirees weren't involved until bids were ready to be reviewed, i.e. far too late in the game to influence budget policy or benefit design.  The four retirees include Stephen Brown, David Hermes, Curtis Milbourne and Teresa Special.  Maybe they can advocate for the use of ERRP funds to ease last year's severe pain.

Final thought:  Why does the city dangle a new time off benefit around health insurance changes?  Last year, it was a Veterans' Day holiday, a seemingly incongruous offering by Councilwoman Charlotte Farmer given the City's strapped finances.  This year it's time off in return for United Way participation at a “care share”, “double care share”, or greater level.  Why is the city prepared to spend over $57,000 on increased time off but nothing for health insurance?

I find the reference to double "care share" symbolic, as it could apply to 2012 out-of-pocket medical care costs for employees.  Should anyone wish to delve into the agenda packet, it is below.  As usual, it's light on the details.

City Council November 1, 2011 Agenda Packet

View more documents from City of San Angelo Texas

City Health Insurance: Late Addendums

The City of San Angelo planned to present its 2012 health insurance recommendation on October 4.  The topic didn't make any October Council agenda.

With no information I cruised the City's web site for requests for medical coverage proposals.  I found the original, plus a number of addendums.  One started with:

The City is very interested in a single provider option. If you are quoting medical, please make sure to include this option if available.

Of course the City is looking for the best deal, but there are other considerations.  Mayor Alvin New wants Shannon Medical Center to kick in Payments in Lieu of Taxes (PILOT).  Might the city use health insurance to arm twist Shannon?

Last year the city passed on small costs to employees but draconian increases to employee and retiree dependents.  The jury is out on changes for 2012, so says the City:

Q.  Is the City still planning to pay all of the employee's premium except for $16.00, or will there be another scenario?

A.  The City contribution for next fiscal year is unknown. This will be determined based on the bid results. 

The City told health insurance companies not to submit bids with higher premium costs.  That means bids should hold the line on costs, causing coverage levels to deteriorate significantly.

On retiree health insurance (Over 65) the city takes one stand:

Post 65 cost is $301.90 PEPM. That amount is broken down below:

$194.90 Hartford
$107.00 Rx (BCBS)
$301.90 Total

The $301.90 is the amount the spouse is billed if they are Hartford participants – the City makes no contribution to the spouse amount.

$16.50 is what the post 65 retiree pays, so the City’s contribution is $285.40.

Later the city stated:

There is no Post 65 RX plan

Clear? Only the bidders can say for sure.

Employees and retirees know the city wouldn't institute new taxes for 2011, effectively throwing 192 people off city sponsored health coverage.  For 2012 Council budgeted new money, which should cause employees/retirees to face greater out of pocket costs due to deteriorating coverage.  It will be a different kind of hit, but a hit just the same.

Update 10-21-11:  Walmart, where many COSA employees have a second job, announced cuts in health benefits for workers.