Wednesday, November 17, 2010

City of San Angelo Mum on ERRP Funding Use

Mayor Alvin New stated employees and early retirees needed to cover the $960,000 increase in the City's projected health insurance costs.  He didn't say how much of the increase related to retirees vs. current employees.  The City has two separate plans, both self-insured.

Retired Police Chief Russell Smith noted the City's participation in the Early Retiree Reinsurance Program, a fact not mentioned by the Mayor and city leaders.  Health & Human Services offered a description of the program.

The Early Retiree Reinsurance Program provides reimbursement to employer and union sponsors of participating employment-based plans for a portion of the cost of health benefits for early retirees and their spouses, surviving spouses, and dependents. The purpose of the reimbursement is to make health benefits more affordable for plan participants and sponsors so that health benefits are accessible to more Americans than they would otherwise be without this program.
The City's application for ERRP funding had to state "how the applicant will use any program reimbursement to meet the requirements of the program, including how the reimbursement received will be used to reduce plan participant and/or the employer’s health benefit or health benefit premium costs."

How does the city plan to use an expected $650,000 in ERRP funding over a two year period?  What if federal money reaches the maximum $810,000?  City leaders owe the public an explanation.  An open and accountable government would share its ERRP application to HHS and the Holmes-Murphy report.

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