Contingent settlement with retirees approved
The mediated settlement agreement unanimously approved in a 6-0 vote Friday by the
The ECHD board voted in
The group of retirees it affected worked for the hospital system before the
As a county hospital, employees did not pay Medicare taxes and they paid into a state retirement fund instead of
When the board voted to replace their benefit plan with HRAs, retirees argued there wasn't enough money in the account to cover secondary insurance policies and some couldn't afford the
"The hospital needs a settlement. They need to be able to tell the bond analysts on the conference call within the next week that they have a contingent settlement in hand," Meisell said.
"Retirees need a settlement because we have lived through a very stressful and strenuous year and a half. I can think of five retirees who have died during that time. That's why we have a contingent settlement."
The Fiscal Year 2017 audit was recently presented to the ECHD board and MCHS administration, during which an audit partner discussed concern over the hospital's debt covenant compliance. The hospital is expected to be discussing their financial situation with bond rating agencies this month. That rating typically is determined by the end of March, Meisell said.
"They had to have a settlement that would bring good news to the bond rating (agencies) and we had to bring some stability to our retiree group," he added.
MCHS President and CEO
"The board of trustees made it a priority for me. They asked me about it during my interview process and how I would deal with the issue because there was obviously controversy over what this was and that they wanted to make sure that the retired employees of this organization were taken care of, but at the same time that we looked out for the fiduciary capabilities of the hospital," Napper said.
The settlement, he said, basically allows that group of retirees to be able to be covered through the age of 65, at which point they will go on to Medicare. There are also fixed payment amounts for people over the age of 65 for those only on Medicare Plan A and for those on Medicare Plan A and Plan B.
"So today was actually a very positive time in the journey of Medical Center in that there's been about a year of issues related to the retirement healthcare plan and on Monday we were able to reach an agreement that will be finalized. The board tonight was approving the ability to go forward with that final settlement," Napper said.
"My personal opinion is that this could be a better compromise for a lot of these people than where they were," Hallmark said.
While there was a significant difference in funding with the agreement presented Friday, MCH retiree
"It's year to year right now, so now at least they know that it will last until they reach 65," Hill said, who has already turned 65 years old. "It's just the amount they're gonna be getting is not gonna carry them to 65."
Meisell said the agreement would increase the compensation for the HRA funding for Medicare-eligible people from
"The problem is, these are flat amounts," Meisell said. "And medical inflation, as most people know, is dramatic. This does not address medical inflation and that's a problem, but we had to agree to it."
Meisell said he hopes as the hospital's finances improve, the issue would be re-addressed in the future to help solve that problem. He also said they needed a better HRA card because there had been significant problems with claim reimbursement.
While "somethin's better than nothing,'" Hill said he still doesn't think what was done was right.
"And honestly the hospital could have put just a little bit of effort tin and created a group and put the (retirees) in that group. They could've gone out to some insurance company and created a group and put the people in that group and funded it for probably what they're paying now and everybody would be covered and not have to go through what they are," he said.
Hill's daughter,
Dodd said Friday, her father and Anderson's sister both withdrew themselves from the lawsuit so there would be no conflict of interest when voting on the litigation. Dodd's eyes started to well with tears Friday as she talked about the impact it has had on the group of retirees.
"(To some people) they're numbers. They're squiggly lines on a graph. But to me, they're faces and they're names and they're stories and they're people. And so I take it very personally," she said.
"You know, my dad plays a part in that, but there's so many other people that I don't just see my dad's face, I see all 300 of these people that I've met and talked to. So I do take it very personally and I do become emotional with I and I think that that's what makes me a good board member is that I'm doing what's right and I lead with my heart."
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