Council votes to extend benefit

City says it won’t happen

The Memphis City Council voted Tuesday to continue subsidizing the health insurance of retirees younger than 65 — and there’s almost no chance of it happening.

Officials of Mayor A C Wharton’s administration told council members Tuesday, backed up by council attorney Allan Wade, that the council doesn’t have the authority to tell the administration to extend the subsidies past the end of 2015.

“People think this is the magic bullet,” Wade said of the resolution. “It’s not the magic bullet.”

And Human Resources Director Quintin Robinson made the administration’s position clear: “We will not pass a $10 million bill along to taxpayers.”

The revelation led to an awkward vote tally: 5-1, with seven abstentions. Voting for the resolution were sponsor Wanda Halbert, Joe Brown, Bill Boyd, Harold Collins and Janis Fullilove. Council Chairman Myron Lowery voted no. The rest abstained.

The vote was a lastditch effort by employee advocates to craft a plan to extend the subsidies to 2017, when the city could begin offering more affordable high-deductible plans to retirees. A reversal later than Sept. 1 would throw the city’s open enrollment process into chaos, according to health benefits consulting firm Segal, which the council hired to look at future plans.

Thomas Malone, who heads the Memphis Fire Fighters Association, and Mike Williams, who is on leave as president of the Memphis Police Association while he runs for mayor, both said they would ask the council to freeze all government spending until the administration agrees to offer the subsidies.

“They’re going to have to take a hard line,” Williams said of council members. But did the Tuesday vote accomplish anything? “They just went through the motions,” he said.

Wade told council members that city attorneys going back to Mayor Dick Hackett’s administration in the 1980s had all taken the same position that the council can only control funding — not policies like offering the subsidies — with resolutions.

Under sharp questioning from council members, administration officials stayed on message Tuesday, saying the city can’t afford the long term, $300 million commitment to subsidizing pre-65 retiree health benefits.

And even though there’s no law that says the city has to pay into the retiree health fund, Finance Director Brian Collins said it’s only a matter of time

before there is a law.

Robinson discounted the view that the subsidies’ end would cause widespread suffering for pre-65 retirees.

“We firmly believe the pre-65s have good options through employers, spouses’ employers and the Affordable Care Act,” Robinson said.

But the prospect of the subsidies’ end didn’t sit well with many of the 870 policy-holding retirees who would be affected, some of whom showed up Tuesday.

One person out of a handful of people who spoke was Kathy Hurley. She said her husband, a former city employee, has cancer, and urged the city to extend the subsidies.

“I hope that you will step up and tell the mayor you want to give these people what they deserve,” she said.

Much of the discussion involved funding, and Halbert, who crafted the subsidies proposal with union leaders and employee advocates, identified several potential funding sources, some of which the administration disputed. Her plan would have reduced the subsidy from 70 percent to 60 percent and tapped health fund surpluses to cover the $4.5 million cost in the fiscal year ending June 30, 2016.