Employee Benefit Trust Minutes - 07/30/2008 •
CITY OF WICHITA FALLS
EMPLOYEE BENEFITS TRUST BOARD MEETING
July 30, 2008
Present: Bill Sullivan, Chair
Darron Leiker, City Manager
Jim Dockery,Asst. City Manager/CEO
Tammy Guerra,Human Resource Manager
Gail Garmon, Employee Benefits Coordinator
The meeting was called to order at 10:00 am
Agenda Items:
Approval of Minutes
Darron Leiker made a motion to accept the minutes of the last meeting. Jim Dockery
seconded the motion. Motion carried.
Financial Statement
Jim Dockery gave a financial report showing the history of the Trust account from June
'05 through June '08. He noted that as of June '08, expenses totaled$5.7 million dollars
with revenue totaling$6 million, up from $4.4 million in June '05 for expenses and$5.2
million in revenue. He stated that he expects the '08 year end revenue to be between$7.9
and 8.2 million with expenses of between$7.9million and $8.2 million. His report
showed that in June '05 the fund had a positive balance of about $400,000 in reserve and
as of June '08, the reserve balance totaled about$2 million. He further stated that when
considering premium increases, it was important to consider that with the current medical
inflation, it would probably be necessary to use part of the reserve to pay claims.
Discussion on retiree benefit changes
Jim Dockery reported on the current categories of premiums and coverage and what the
proposed changes would be for the future. The recommendation is to leave all current
retirees on the plan and continue to offer the Medicare Supplement coverage to them now
and in the future. All future retirees (those retiring after January, 2009)would be able to
keep the coverage,but would not have a Medicare Supplement available to them through
the City when they become Medicare eligible. In addition,the dependents would come
off the plan at the same time as the Medicare eligible retiree. He further stated that it
was possible that all current Medicare eligible spouses on the plan,would be told that
they would no longer have coverage after December 31, 2008. If this action were taken,
the same would be true for currently covered surviving spouses of deceased retirees.
After some discussion, Tammy Guerra suggested leaving the over/65 spouses on the plan
for an additional year while they consider other alternatives. Jim Dockery emphasized
that the proposed changes are only possibilities and would need Council approval.
Darron asked that as soon as a definite decision was made, that letters be sent to each
current retiree detailing the effects of the changes to them personally.
Discussion on premium increases
Jim Dockery presented a report showing a possible increase of 7% in employee and
current retiree rates, with a 4% increase in the City's contribution. He stated that current
rates generate about 2.2 million dollars in yearly revenue. The 7% and 4% increase
would be an additional $382,000. Darron Leiker asked Jim to look at the budget and see
if the City could increase its contribution by more than 4%, noting that at least a 7%
increase would definitely be necessary to the employee and retiree premiums.
Jim then presented a 3 tier plan for Medicare eligible individuals: (1.) subsidize current
Medicare retiree rates with$100 per month, (2.) letting the retiree rate remain the same
and increase the spouse's Medicare coverage to $320 per month,or(3.) subsidize the
retiree $250 per month.
Jim then made a motion to recommend the following to the Council for a January 1, 2009
effective date:
a. Raise retiree premiums by 7%
b. Current employees would not be eligible for coverage once they become
Medicare eligible
c. Current retirees under/65, when Medicare eligible, the City would subsidize
the plan with$100 and the spouse would get their own coverage
d. Current retiree and spouse already Medicare eligible,the City would subsidize
retiree with$250, 0 subsidy for the spouse,but spouse can stay on the plan
Darron seconded the motion. Motion carried.
Discussion on adding dependents after retirement
Following a letter from a retiree requesting that his spouse be allowed to enroll upon
retirement from her current employment, the board decided to contact the Trust broker,
Cassie Stennett, and have her find out what the industry standard is in such matters.
After getting information from her, the board will discuss the matter at a future meeting.
Discussion on request from employee's physician for weight loss surgery
The board had received a request from the physician of an employee to consider making
an exception to her coverage that would allow her to have weight loss surgery and have
that surgery covered by the plan. At the same time, another such request was received
from another employee. Darron Leiker stated that he had discovered that such surgeries
are covered by some plans, but that recipients are usually required to have met certain
criteria prior to having the procedure. It was suggested that some research be done on the
impact of such a request, and the board would then discuss these requests at a future
meeting.
The meeting was adjourned at 11:50 am.
R pectfully s mitted,
cli-P
Gail Garmon
Employee Benefits Coordinator