December 11, 2008

Rising Costs Force City to Increase Deductibles

Faced with the ever increasing cost of providing health insurance for employees, the Memphis City Council voted 3-0 to increase premium deductibles with discussion of additional changes in the program likely in the next policy year to try to control costs.

At the December 4th meeting, the board of aldermen agreed to increase the employee’s health insurance coverage from a $500 deductible to a $1,000 deductible, also increasing the out-of-pocket maximum from $1,000 to $2,000 per employee.

The move was made to offset a 9.9% price hike that the city would have witnessed maintaining the existing coverage as provided by Blue Cross Blue Shield.

With no change, the city would have seen its monthly premium for the employees benefit package increase from $22,805 to $25,086. The approved plan will cost the city $22,271 monthly.

“I don’t want anyone to feel like we are pulling the rug out from under them, so I want to say this now, that I anticipate suggesting further changes in this program next year if costs don’t change,” said Alderman Chris Feeney. “I’m only one of four votes, but when we look at increasing costs across the board, we have to look at our options.”

The council agreed to plan a series of meetings with the employees to discuss future insurance options and to review the possibility of self-funding a portion of the program or transitioning a portion of the benefits package to health savings plans or some other system that could possibly better benefit both the employees and the community.

In other business, the council voted 2-1 to add Veteran’s Day and Martin Luther King, Jr., Day to the list of holidays observed by the City.

Mayor William Reckenberg brought the proposal to the council, stating he had received complaints regarding the city not observing Veteran’s Day, particularly by not putting out the U.S. Flags like it does in observance of Memorial Day.

The Mayor pointed out that both state and county government observe Martin Luther King, Jr. Day, Columbus Day, Truman Day and Veteran’s Day.

Alderman James Parker noted that most area businesses do not observe those holidays. He was the lone no vote on the proposal.

Alderman Lucas Remley noted that he worked for the county, which did observe those holidays, and supported the proposal to reward the city’s employees.

Ultimately the group agreed to recognize Martin Luther King, Jr., Day and Veteran’s Day as city holidays.

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