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Home My WebLink AboutIR 10069 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10069 To the Mayor and Members of the City Council h�T�i7 Page 1 of 4 �i �i7 Y *a SUBJECT: FIRE FIGHTER HEALTHCARE UPDATE #qU f Y@73 On October 24, I made presentation to the City Council with Michael Glynn, President of the International Association of Fire Fighters Local Association,regarding their proposed provision of a healthcare plan to active and retired fire fighters and their spouses and dependents. The guiding principles of that negotiation are: • Association will assume responsibility of healthcare for all recruits, active fire fighters and pre-65 retirees • Separation of firefighter plan will not have a negative financial impact on the City; Association will cover all transition costs • City's exposure to liability will be minimized to every extent possible • Association assumes all accountability for the success of their plan At that time, staff committed to return to the City Council for consideration of an amendment to the Collective Bargaining Agreement and a Healthcare Contract based on the following task list. Action Item Responsible Complete Status Party 1. City City City provided preliminary projection in July following contribution development of City premium structure based on 2017 and transition enrollment census. City identified worst-case City costs ancillary costs on October 201h due to retained finalized services and reduced headcount; provided update on November 6th with better than expected news immediately upon receipt by UHC underwriter. On November 13th, Association confirmed agreement with base methodology, noting that composite rate will change based on 2018 enrollment migration to high- deductible plan. Association requesting further discussion of life insurance structure, wellness payments, and IT costs. Additional negotiation may be required related to HSA/FSA administration constraints of State and Federal law. 2. CBA City and Association provided a draft to Human Resources in amendment Association June; staff did not evaluate the merits of the language agreement due to the negotiations on the City-wide approved plan, the development of City-wide rates/budgets, and the known commencement of Collective Bargaining in October. The City provided a draft document to the Association on 11/3/2017. The City will send revisions to the Association reflecting subsequent conversations by ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. To the Mayor and Members of the City Council h�T�i7 Page 2 of 4 �i �i7 Y *a SUBJECT: FIRE FIGHTER HEALTHCARE UPDATE #qrF rn Yg7'3 11/20/2017. The City and the Association have agreed that these items must be discussed in a posted session of Collection Bargaining. These meetings have been tentatively scheduled for 11/27/2017 and 11/30/2017. 3. Employee Association vote to amend CBA 4. Waiver City and Association provided draft waiver that they had been language Association using with retirees without City approval to the City approved on 10/2/2017; the document did not adequately protect the City from potential liability. City provided draft to Association on 11/3/17 noting that additional changes would be forthcoming from outside counsel; on 11/6/17, Association submitted requested changes to indemnification and waiver of right to sue language; City provided revised document to the Association on 11/8/17,retaining the intent of the waiver and indemnification language. Association accepted the terms on 11/10/17. 5. Retiree Association waivers received (100%) 6. City Council City Will be scheduled for City Council once 1-5 are approval of complete. CBA and healthcare contract 7. Association Association The City received a lengthy legal review of the create Trust proposed Trust Document from outside counsel on 10/27/17 and met with her on 11/3/17. As a result, the City provided amendments to the Association on 11/9/17, to include prohibition of expansion of Trust responsibilities to other fire fighter agencies; limitations on investment vehicles; limitations on prohibited transactions. 8. Association Association Unknown; Association has stated their consultant will plan handle but has not provided evidence of their contracts preparation. (TPA, PBM, ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. To the Mayor and Members of the City Council h�T�i7 Page 3 of 4 �i �i7 Y *a SUBJECT: FIRE FIGHTER HEALTHCARE UPDATE #qU f ye,?5 RBP); premiums finalized 9. Data City and In order to manage pre-tax deductions from interfaces Association employees, the final plan will need to be created in the with City and City's payroll system. Typically 90-120 days are FWERF necessary to finalize associated data feeds with vendors. On 11/6/17, the Association confirmed that Maestro will manage the multiple vendors on their behalf City staff has contacted Maestro to initiate discussion. The ERF Board advised in a public meeting on 10/25/17 that they had not been contacted since the spring on the requirements for a transition. 10. Transition City and and Association enrollment plan Staff has met five times with Association representatives to learn more about their proposal and to work through the financial and legal issues associated with the potential transition. Note that the City does not have sufficient information from the vendors, their partners nor their references to assess the financial projections, likely success of the Association's plan or the potential impact to members. As a result, the City is working to ensure that it is an orderly transition and that the other members of the City health plan and the employees do not assume any cost or liability associated with this proposal. Realistic Schedule Constraints 1. Retiree waivers—The Association predicts two weeks are necessary to obtain signatures but the City's experience with retirees indicates this may take much longer. 2. Collective Bargaining open meetings to finalize language of Collective Bargaining Agreement Amendments and Healthcare Contracts 3. 90 to 120 days of IT work after plan design complete 4. Completion of all of the vendor contracts by Association 5. Open enrollment and employee education Ci�Healthcare Consultant Consultant There was a suggestion made that the City's healthcare consultant may have a conflict of interest in the advice they are providing to the City on this matter. Holmes Murphy and Associates, LLC provides consulting services to assist the City with the implementation, evaluation, and monitoring of employee benefits and related insurance coverage, including but not limited to, health and welfare benefits. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. To the Mayor and Members of the City Council `�;�� Page 4 of 4 r SUBJECT: FIRE FIGHTER HEALTHCARE UPDATE x rsFa For these services, Holmes Murphy and Associates, LLC are paid a flat fee of$145,000 per year that is not based on the number of plan participants. Therefore Holmes Murphy and Associates, LLC, is not incentivized to promote or solicit products and services other than what is requested by the City of Fort Worth. Staff has reached out to the Association to provide details on the allegation that Holmes Murphy has a conflict of interest regarding the healthcare carve out and have not have not received a response. If you have any additional questions,please let me know. David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS