Strickland: Health care change may retain workers

Nov. 09--Memphis Mayor Jim Strickland consented Tuesday to offering limited health care subsidies to city retirees younger than 65, which was often cited as a major reason for a shortage of police officers and firefighters.

The subsidies will take the form of rolling Health Reimbursement Accounts,offered along with a new set of medical plans through a private health care exchange, according to a city press release. Strickland will announce more details about the partnership with the exchange at 1:30 p.m. Wednesday in City Hall.

Pre-65 retirees lost their original, 70 percent health care subsidies at the end of 2015 as part of a plan by previous mayor A C Wharton -- and supported by then-City Council member Jim Strickland -- to reduce the city's liabilities for costly medical claims. Meanwhile, retirees older than 65 were shifted to Medicare.

"When we took office, we actively listened to our current employees' concerns about benefits," Strickland, who was sworn in Jan. 1, said in a memo to employees Wednesday. "They repeatedly told us that restoring a health insurance subsidy for pre-65 retirees would be a major step toward retaining employees, particularly in public safety. I am committed to retaining employees, particularly public safety employees, and this is a major step in that direction."

In his memo, Strickland said he expects the new health plans will save "the majority" of post-65 employees money, but his main goal was to make plans affordable enough for pre-65s, many of whom were driven off of the city's insurance by costs that in some cases consumed entire pension checks.

"I want you to know the single decision point to which we boiled it down: The private exchange is the only realistic option to save pre-65 subsidies without a significant tax hike," Strickland wrote.

But despite the administration's reassurances, some retirees and city beneficiaries have looked at the private exchange with skepticism, fearing the total out-of-pocket cost for the high-deductible plans could be greater for employees with more health issues.

In the memo, Strickland referenced those concerns and lamented that "conflict has grabbed the headlines and sound bites on this topic, largely drowning out the substance of what's happening."

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