Tuesday, July 1, 2014

Safety Net Considered for City Retirees Affected by Budget Cuts

Posted By on Tue, Jul 1, 2014 at 11:44 AM

A $2 million safety net could be on the way for retired Memphis city employees affected by the recent cuts to their health care benefits by the Memphis City Council two weeks ago.

A council committee approved the money for the safety net Tuesday. The committee will discuss the funds again in two weeks before it goes for a final vote by the full council.

The funds would not come from the city’s regular budget, said George Little, the city’s chief administrative officer. The funds for the safety net would come from savings found from Cigna, the city’s healthcare provider, through administration fees and some other programs.

  • Ford
The safety net was proposed by council member Edmund Ford Jr. The fund would help some retirees that could have “extreme” financial hardships when the changes to the benefits take effect in October. The safety net would help them pay co-pays, deductibles, and more.

The health care changes came as council members passed the city’s budget two weeks ago. The changes will take away some major health care subsidies from retirees over age 65 and will replace them with Medigap coverage or another plan. The changes will also cut the spouses of city employees from the city’s health insurance plan if they are eligible to get insurance rom their employer. The changes will also levy a higher monthly charge of $120 for smokers on the city insurance plan.

  • Collins
“I applaud (council member Edmund) Ford for digging into this and finding out there are cracks in the system,” said council member Harold Collins, “but when we made this vote, we were assured by (human resources director Quintin Robinson) that y’all did everything to do to assure we not have these kinds of cracks.”

Collins and other council members worried that $2 million might not be enough money to cover all the hardships out there. They also wondered what defined a “hardship” because all financial situations are different.

But council member Joe Brown said making a safety net at all was “hypocrisy” because the council and administration had taken away “something that retirees had rights to.”

  • Brown

“We committed a crime against retirees and now we’re coming back and saying we’ll give you a little leniency,” Brown said. “Making (the healthcare benefit) whole is the only way to make it right.”

Ford also expressed concerned that many (if not most) of the retirees for which the city is paying the healthcare subsidy don’t live in Memphis. The idea of residency requirements for employees was raised and quickly fell but was left on the table for discussion and called a “problem” by council member Bill Boyd.

Council members worried that the safety net program could grow too large or might not be able to take care of all with financial hardships in the wake of the group’s budget vote.

“We’re not going to leave anyone behind,” Little said.

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