Friday, November 19, 2010

Early Retiree Posse Will Arrive in 2012

It suddenly became clear why San Angelo City leaders didn't want to discuss Early Retiree Reinsurance Program (ERRP) funding from the federal government during the last City Council meeting.  The light dawned as I read Health and Human Services' (HHS's) statement regarding ERRP:

“For example, for a sponsor that pays a premium to an insurer, if the premium increases, program funds may be used to pay the sponsor’s share of the premium increase from year to year, which reduces the sponsor’s premium costs.”  

The City can use ERRP to pay its portion of premium increases. The City's doing 0% this year, passing 100% of increases to those covered.  Thus, ERRP is off the table.

The City wants ERRP funds to go toward its premium increases, not those passed through to workers or early retirees.  This explains their abject silence, until Retired Police Chief Russell Smith broached the topic.  Once challenged, city leaders stammered and stumbled over ERRP.

Help is available for City employees and early retirees, a projected $515,000 between June 1, 2010 and December 31, 2011.  The City plans to bank 19 months of ERRP reimbursement, before offering improved benefits or decreased premiums.  It seems San Angelo's HR Manager Lisa Marley spoke prematurely, nearly a year and a half early.

The current ruse for not applying a portion of the expected reimbursement in 2011 is a "lack of clarity" regarding qualifying claims.  HHS conducted two webinars on the topic in October. Did the City have anyone participate?

The city remains evasive and non-forthcoming on this issue.  I have compassion for them.  It's hard to publicly state, "we got a gift from Uncle Sam and only wish to apply it toward our share of premium increases."  That could make early retirees angry.

Paid local leaders are clear in their position and show no signs of budging.  How might elected members and religious leaders react?  We'll find out November 30  December 7.  (Two weeks in "City Council time" can be three weeks)

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