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Huntsville City Council Reverses Policy in Favor of Retirees

By Walker County News Today staff

The Huntsville City Council voted unanimously to allow city retirees over age 65 to re-enroll in their city-funded healthcare plan while canceling their enrollment in a 2016 plan that would have provided them with reduced benefits.

Ward 3 council member Ronnie Allen had put an item on the Tuesday meeting agenda aimed at getting council to  clarify for city retirees over the age of 65 the changes in their city benefits. A group of retirees at Tuesday meeting implored council to reconsider its decision to move them from their current plan to one that would decrease the city’s contributions and reduce or eliminate current benefits. After discussion at that meeting, council opted to reconvene in special session Wednesday to make a decision.

Allen rescinded his motion in favor of Mayor Mac Woodward’s motion to allow the city to reinstate retirees in their 2015 plan.

Julie O’Connell, the city’s director of human resources, spent the day Wednesday researching the means of allowing affected retirees to cancel their enrollment in the new plan and re-enroll in their existing plan, which would have elapsed on Dec. 31, 2015 if the council had not acted in favor of retirees at Wednesday’s meeting. O’Connell explained to council Wednesday the mechanism for allowing retirees to make the switch back to their existing plan and explained the economic impact on the city.

The city’s cost would go up about $21 per person per month but there would be no financial impact on the 34 affected retirees, she said. O’Connell emphasized that retirees would have to call and cancel their enrollment in the new policy and re-enroll in their existing plan.

Council members, though pleased to restore benefits to city retirees, also cautioned them about what the future might bring, given instability in the insurance market.

“What this motion, in my opinion does, is straightens out the retirees going back to what they did have last month,” said Ward 2 council member Tish Humphrey before the vote. “There is nothing different, period.”

But Humphrey said she wanted to make clear that the vote reverses one of the goals of the city’s strategic plan, which a majority of council supported, to address the city’s unfunded liability in healthcare costs for retirees. The new plan for retirees, which council asked City Manager Matt Benoit to look into, would have reduced that liability.

“We as a council are making the decision to spend the money that is not in the budget right now because we have a city staff that did what we told them to do… I am thrilled with the mayor’s motion. This has nothing to do with that motion except I don’t want these retirees thinking this motion says, ‘O.K., y’all, everything’s hunky dory and wonderful. Life’s going to go on now. Live and prosper until you’re 125 years old. I don’t think that’s what we’re doing at all.”

Humphrey and at-large council woman Lydia Montgomery emphasized that because of the “earthquake” going on in the insurance industry associated with the Affordable Health Care Act, the council’s decision Wednesday night should not be viewed as a permanent one.

“I don’t want anyone to walk out of this meeting thinking everything is wonderful, and you never have to worry again,” Humphrey said. “There’s no guarantee you’re going to have city insurance because there’s no guarantee that city employees are going to have insurance. You don’t know what’s going to happen.”

Ward 4 council member Joe Rodriquez echoed Humphrey and Montgomery in emphasizing that city staff should not be blamed for any decision to assign retirees to a new plan, but he reassured city retirees the city would continue to look after them despite uncertainty in the insurance market. “We will never leave you out there stranded. You will always have some insurance. But, as we said, it’s changing rapidly.”

After the vote, outgoing Mayor Mac Woodward asked council and city staff to stay abreast of changes in the insurance industry and plan ahead for issues like retiree healthcare. He also asked council to address the city’s unfunded liability as part of a council committee effort on long-range financial planning.

“Unfunded liability is going to be a part of (planning for the city’s future.) I’m going to ask this committee to take this on with it as a part of their long-range planning. I think this is going to play into our strategic plan…I hope you’ll do that because it’s important. This (unfunded liability) is going to affect our debt ability, our bond rating, our interest rates and what we’re going to do in other areas of the city.”

Council members also thanked Mayor Mac Woodward for his 12 years of service on council. At-large council member Andy Brauninger, elected to replace Woodward in a Dec. 12 run-off election, will be sworn in at the council’s first meeting of the 2016 on Jan. 5.

Walker County News Today can be reached via email at: Info@CountyNewsToday.com

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