Thursday, April 8, 2021

Life-time health insurance for former council members drastically reduced

by Rod Williams, 4/8/2021 - After an effort of more than ten years, finally the provision of life-time health care insurance for former council members has been curtailed.  It has not been completely eliminated but significantly reduced.  The bill reforming this benefit for former council members passed Tuesday night. 

Currently, and it has been this way since sometime in the eighties, once a council member leaves office, he may continue to receive Metro health insurance under the same terms as a current metro employee.  The former councilman pays 25% of the premium. We are the only city in America providing such a generous benefit to former council members.

As changed, former two-term council members would continue to get the metro health benefit for two years and would pay 25% of the premium.  Then, for two years they would pay 50% or the premium and then the portion paid by the former councilmember would increase to 75% of the premium. When they reach age 65, the Metro insurance becomes their secondary insurance to Medicare.  Probably most would drop it at that time because there are better plans for a secondary insurance rather than paying 75% of the premium for Metro insurance.

The "whereas" section of the bill (with portions highlighted by the me)  explains why this change needed to occur:

WHEREAS, in 2019, Metro Council members received a $8,100 raise approved in the prior term which was recommended by the Department of Human Resources under the belief to properly compensate Metro Council would help to promote a more diverse and inclusive Council body; and

WHEREAS, the citizens of Davidson County expect the Council to manage taxpayer money wisely, yet over $800,000 per year is spent on a benefit for Councilmembers that is not offered to other part-time Metro Government Employees; and

WHEREAS, the Metropolitan Government spent $837,438 health insurance benefits for both current and former Metro Council Members in 2020. This cost is expected to increase to $1,208,134 by 2024; and

WHEREAS, July 17, 2020 the Metropolitan Council passed a $1.066 property tax rate increase in the USD ($1.033 in the GSD), constituting the highest increase in the history of Metropolitan Nashville; and

WHEREAS, the Metropolitan Government is $4.5 billion in debt, with depleted reserves; and 

WHEREAS, in 2014, the Mayor's Office contracted with an independent consulting company (Deloitte Consulting LLP) to provide data upon which Metro could make decisions about current pay levels. This study revealed that none of Metro Nashville's peers offer retiree medical coverage to council members. To be consistent with common practice, the study recommended that Metro eliminate lifetime medical coverage for Council Members; and

WHEREAS, the Metropolitan Council should remove the lifetime health insurance benefits for Council members after they leave office.

I would add one more reason:

WHEREAS, when this benefit was passed sometime in the 80's, Metro did not have many former Council members.  It was not uncommon for  members to serve twenty or thirty years and be old men when they retired, so this benefit was not very costly.  Now, with term limits and younger people serving, there are a lot of former council members and being younger, they can receive the benefit for a much longer time. 

 This change does not effect current former councilmembers or current members who will have served two-terms by 2027.  They still will get the current level of benefit.  Members elected from now on will get the reduced benefit. 

While I would like to see the benefit eliminated in its entirety, there is no doubt that something stronger would have failed. Since 2012, efforts to end the benefit failed on four separate occasions. 

The lead sponsor of this bill was Council member Tonya Hancock.  She is commended for her taking on this fight. The bill passed by a 34-3 vote.  

Council members Emily Benedict, Colby Sledge and Tanaka Vercher were the only "no" votes.

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