The Memphis City Council is still grappling with changes to employee health care benefits that the legislative body approved when it passed the city budget in June.
The council approved cuts to some retiree health care insurance subsidies and approved a 24 percent increase to insurance premiums for employees.
The changes were met with backlash from employees, retirees, and the unions that represent them. Hundreds of police officers and fire fighters called in sick during and after the Independence Day holiday in protest.
Proposals to change and add to what the council approved popped up almost immediately after the vote. Memphis Mayor A C Wharton’s administration has proposed a $2 million Health Care Assurance Plan to ease the pain of the cuts to some retired employees. The Memphis Fire Fighters Association proposed a high-deductible insurance plan, which union leaders said would save the city money, be cheaper for employees, and keep retirees on the city health plan. That plan would replace the council’s new plan set to take effect on October 1.
Council members expressed frustration Tuesday with the original changes and how they were presented to them, during a meeting of the council’s personnel and intergovernmental committee.
“I am very disappointed with this entire process,” said council member Wanda Halbert. “We have a trust issue again at this table.”
Halbert said Wharton and his administration presented the changes to the employee and retiree health care plan only to certain members of the council. George Little, the city’s chief administrative officer, disagreed and said he, Wharton, and others had meetings with her on the issue.
Memphis human resources director Quintin Robinson said the last general premium increase was in 2010. The cost of holding those rates steady has cost city taxpayers $13 million, Robinson said.
The agreement between the city and its employees on premiums is that the city will pay 70 percent of premium rates and the employees will pay the remaining 30 percent. That number has shifted over the years, according to Little, with the city now paying about 72 percent of overall insurance premiums.
The approved premium increase of 24 percent is to make the existing insurance plan solvent, Little said. If the increase is delayed, it will “materially and adversely effect the budget.”
The fire fighters’ plan will be heard by the council in two weeks.
