Proposed RuCo retiree health plan sent back to subcommittee on The Murfreesboro Post

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Proposed RuCo retiree health plan sent back to subcommittee

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By: MICHELLE WILLARD, Post Staff Writer

Posted: Thursday, July 24, 2008 2:59 pm

Proposed RuCo retiree health plan sent back to subcommittee | RUCO, INSURANCE

TMP Photo by Kelly Hite. Rutherford County Finance Director Lisa Nolen addresses the concerns of the Rutherford County Retired Teachers Association during the county's Insurance Committee meeting Thursday afternoon.

Rutherford County Retired Teacher Association used its inside voice Thursday afternoon and convinced the Insurance Committee to withdraw its drastic overhaul to retiree health benefits.

After RCRTA representatives Lee Campbell and Liz Bennett addressed the committee with their concerns, committee member Merry Hickerson moved to send the proposed changes back to a subcommittee to develop a more palatable option.

“We ask you to find a way to keep the promise your predecessors made to the county’s employees,” Bennett said.

Current and retired county employees have been outraged since the county announced plans to overhaul its retiree health plan, brought about by recent changes to accounting policies require governments to project retiree health benefit costs and record the liability on a yearly basis. This new requirement is forcing many governments to reevaluate retiree health coverage.

Before now, the county funded retiree health care on a pay-as-you-go basis at a cost of $2 million per year. But now they want to pay for current and future retirees on an annual basis, much like how the county funds its pension plan.

“We’re writing a check right now and we need to make sure the money’s in the bank,” said Greg Hall, a citizen at-large on the insurance committee.

The county would have to record a $26.5 million liability on its books to continue funding retiree health care at its current level.

“It would be irresponsible for us to ignore the numbers that have come out of this study,” County Mayor Ernest Burgess said.

The Insurance Committee approved a plan in June that reduced the yearly cost to $3.5 million with drastic cuts in the retiree health core plan.

The most sweeping change is the requirement for retirees to enroll in Medicare Part D for prescription drug coverage for individuals over 65 years old.

Recent and future county employees will have to work longer and only have access to the county’s health plan after retirement. The county will not provide any supplement to the cost.

Long-term county employees will receive a graduated supplement based on their years on the job after Jan. 1, 2009 and the county will contribute $78 per individual or $145 per couple for Medicare Part D, which is 50 percent of today’s Medicare cost.

As for current retirees, the county proposes little change to this group, except for those over 65 years old.  These former employees will continue to see the 50-percent contribution for health coverage, but they will be required to enroll in Medicare Part D for pharmacy coverage.

Hickerson, highway department representative, wanted to rescind the committee’s June decision and review all options to develop a better understanding of the proposed changes in the public.

Jeff Sandvig, Rutherford County Schools representative, amended the motion to set the annual cost from $10 million-$11 million.

The motion was approved unanimously, sending the retiree health insurance plan back to subcommittee, which should have a less drastic option for cutting the county’s liability in the next few months.

Michelle Willard can be contacted at 615-869-0816 or mwillard@murfreesboropost.com.

Tagged under INSURANCE, RUCO

Member Opinions:

By: appdancer on 7/25/08
What folks continue to be misinformed about is that this is NO ¨requirement¨ I would like to see us stop using that term as it is incorrect in this context.

steve cates

By: MichelleWillard on 7/26/08
Actually, it is required that Rutherford County follow the standards set by the Government Accounting Standards Board by the county's own laws.

The private act can be found at www.ctas.utk.edu/public/CTASpriv.nsf/PrivateActs/574DC1143DE1B118862569EC0074209C/$FILE/RUTHERFORD+CO+-+2007.pdf?openelement