Archive for the ‘MLGW’ Category

Health Care At Local Public Employers Under Obamacare

Tuesday, March 25th, 2014

March 24, 2014

Health Care At Local Public Employers Under Obamacare

There was a fascinating presentation last Tuesday at the City of Memphis Executive Committee meeting. Shea Flinn introduced Stuart Collier of Collier Insurance who introduced Eric Hellman of Continuous Health.

Mr. Hellman’s presentation sought to explain Obamacare’s effect on health care and particularly its possible effect on health care costs for the City of Memphis and by the same token, Shelby County and the MLGW. It was a well done presentation and you can see his power point presentation here and also you can go to the City of Memphis website and see and hear the videotaped presentation (

It was long but very informative. What I got out of what he was saying is that the Affordable Care Act (Obamacare) opens up the possibility of reducing cost for the City of Memphis by letting lower paid employees go to the state exchanges to get subsidized coverage. That means the taxpayers, nationwide, will pick up part of our heath care cost.

There are four main points in Obamacare as it was originally signed. (Of course it changes day to day with executive orders).

  • All employees working 30 hours per week or more must be covered.
  • The coverage provided must be affordable. Affordable means it must pay at least 60% of the average medical costs of what the Department of Health and Human Services determines to be a standard population.
  • Obamacare limits the amount an employee can be required to pay towards the annual health insurance premium to 9.5% of the employee’s household income.
  • Obamacare requires coverage to be affordable and for those employees whose annual income is less than 400% of the Federal Poverty Level, Obamacare provides a federal tax credit to partially subsidize the purchase of insurance in a public exchange. This translates to individuals with incomes up to $44,680 and to families of four with incomes up to $92,200.

Confused? What a monster these DC politicians have created. However I think Collier and Hellman should be hired to present their (more…)

Health Care For Public Retirees

Thursday, February 20th, 2014

February 20, 2014

Health Care For Public Retirees

This is another huge cost area for which the taxpayers are paying. You are paying 70% of the health care cost for City of Memphis and Shelby County retirees and 75% of the cost for MLGW retirees. The bills come each year for medical care for retirees and their families and the current annual bills are paid by the City, County and the MLGW as they occur.

But like pension liability, there is a future cost liability that is supposed to be taken care of by the OPEB funds (Other Post Employment Benefits), mainly future health care costs and life insurance for retirees). This is where the problem lies, mainly with the City of Memphis, and to a lesser extent with the MLGW and Shelby County.

The unfunded OPEB liability for the City of Memphis is $1.29 billion dollars. For the MLGW it is $420 million and for Shelby (more…)

Line Of Duty Disability Reform

Thursday, February 13th, 2014

February 13, 2014

There are lots of things that need reform in the Memphis pension system and we have talked about the need for going to a defined contribution system rather than the current defined benefit system. Hopefully we will get there if the Mayor and the City Council do the right thing.

However I have often spoken about the need for line of duty disability reform. The Memphis pension board regularly approves applications for line of duty disability applications and has ten times more former employees on line of duty disability than Shelby County government or the MLGW. (These people on line of duty disability get 60% of their final average salary for their lifetime tax free).

Now I find out from Jeni Diprizio (a great reporter for Channel 24) that last month (January 30, 2014) Jason Webb applied for and (more…)

Health Care! What Does It Cost?

Tuesday, February 11th, 2014

February 11, 2014


As if Obamacare is not bad enough, trying to compare local health care rates is not easy. But I will make an attempt to compare the active employee rates and the cost to you the taxpayers for the City of Memphis, the County and the MLGW. Here we go.

First you have to look at the plans available in 2014.

The City of Memphis has three options: Premier, Basic and Value plans. Attached is a brief overview. The prices shown in red are what the employee pays twice a month or 24 times per year. This is the 30%. You, the taxpayer, pays the 70%.

The Basic family plan costs the employee $4127 per year. It costs you the taxpayer (70% of total cost) $9630 per year. It’s total cost is $13757 per year.

The Basic plan covering the employee only costs the employee $1944 per year. It costs you the taxpayer (70% of total cost) $4536 per year. It’s total cost is $6480 per year.


A New Idea, Trust Free Enterprise

Wednesday, February 5th, 2014

February 3,2014

A Hybrid Pension Plan Proposal

I have been following Mayor Wharton’s proposals in his state of the City speech and in the PFM group’s 5 Year Strategic Fiscal And Management Plan for the City of Memphis. I congratulate the Mayor for hiring this group and for the well written and realistic facts in the plan. I will be commenting on the plan over the next months as the debate rages in the City and the city council.

I have attached here part of the 182 page plan that concerns pension reform. They are recommending various pension plans for unvested (less than 10 years of service) and future new employees. The recommendations include a defined contribution plan or a combination of a defined contribution plan and a limited defined benefit plan similar to what the state of Tennessee has done for teachers and state employees.

Several years ago I participated in a pension reform study for Shelby County which ended up in Plan D for the county for new employees. The City adopted a similar plan for new employees only basically doing away with the disastrous 25 year retirement (more…)

Looking Forward to 2014

Monday, December 30th, 2013

December 30, 2013


What’s New for 2014?


Well the affordable care act (known generally as Obamacare) is going to be on everyone’s mind. On my mind for some time has been the question of how it would affect the already high health care costs of the City of Memphis, Shelby County and the MLGW. This is a big subject and I will take on first the City of Memphis. I finally got their new rates and information for active employees. Here is the information and here is the statement about the new plan and rates.


1) City of Memphis plans are no longer considered Grandfathered under healthcare reform

2) Pre-Existing Condition Limits no longer apply to anyone regardless of age

3) Dependents covered to age 26 even if the child has access to his/her own employer coverage.

4) All copayments, coinsurances and deductibles now apply toward the Out of Pocket (OOP) Maximum

5) Coverage for Clinical Trials

6) Additional guidance for Women’s Preventive Health/Contraceptive Coverage – No Cost Share

7) Vitamin D Coverage for prevention of falls in older adults

8) Medical Plans – Employee contribution increased to 30%

9) Increase in dental premiums

10) Increase to ER Copay – Medical Premier Plan Only

11) A third medical plan option – the Value Plan

12) Notarized documents no longer required; instead you must provide your Oracle employee ID number

(located on your ID Badge or your paycheck stub) along with your signature.

Obamacare has arrived, whether you like it or not, and the costs have been driven up about 16.8%. The City of Memphis is self insured and pays all the medical costs but an insurance company handles the paperwork.

The following is the conclusions of Mercer (a city hired health care consultant) in a report dated April 23, 2013) on the impact of Health Care Reform on the City of Memphis.

  • Cost could increase annually by $7.6 million if all of the current waivers enroll in the plan.
  • Excise tax for 2018 is $477,000 dollars and will accumulate to $50 million over the following 10 years.
  • If the affordability test was based on dependent coverage contributions, City of Memphis could pay a penalty for up to 25% of their population.
  • Transitional Reinsurance fee will cost the City of Memphis about $1.4 million starting 2014.

Here is a brief recap of the new rates. This is the total annual cost with the City paying 70% and the employee paying 30%.

  • Premier Plan for a single                                                    $6,015.20
  • Premier Plan for a family                                                    $14,201.60
  • Basic Plan for a single                                                          $5,544.00
  • Basic Plan for a family                                                         $13,757.60
  • Value Plan for a single                                                         $3,360.00
  • Value Plan for a family                                                        $11,800.00

How does this compare with what you will pay in 2014 if you know? You will have to look at the details of the plan which I have attached above. There is much more to explain but this is the first dose of the new health care landscape.


Halloween and Smart Meters

Thursday, October 10th, 2013

September 10, 2013

Halloween and Smart Meters

Halloween is approaching and a good friend and neighbor told me that he had seen Janis Fullilove following around two men dressed in scary costumes. They were knocking on doors and telling residents that they were there to deliver their “SMART METERS”. While it was impossible to tell who these two costumed gentlemen were, one wag told me that he heard them calling each other Jerry and Chris.

Well no one has knocked on my door yet, My neighbor apparently is in one of the chosen groups that are scheduled to get the first of the recently approved smart meters. After the knock on his door, he asked how to opt out of the program and he was given the attached letters and documents. Talk about scary!! He is still looking over the details of the OPT OUT and has not come to a decision yet. The documents point out lots of good things that will happen if he OPTS IN and lot of bad things that can happen if he OPTS OUT.

But be of good heart. You time will come eventually in the OPT IN/OPT OUT game. In the meantime study the choices. And let me know what you think.

Put Your MLGW Bill On Your Credit Card

Monday, September 23rd, 2013

Put Your MLGW Bill On Your Credit Card


My Wife is much more alert to prices and deals then I am. However recently I found out that the MLGW will now let me put my MLGW bill on my credit card. Most government agencies charge at least a 2% fee to let you pay your tax bills or other fees by means of a credit card.


Since I earn air miles on my credit card and because it delays the payment of the bill I decided to sign up to pay my MLGW bill on my credit card. Why not? I went to the website and tried to set it up. I got to one point in the setup screens and got hung up and could never complete the setup. I eventually called and got it completed. Now my bill will automatically be paid by my credit card and I will get an electronic copy of the bills for my records.



A Backdoor Tax Increase

Tuesday, September 3rd, 2013

September 4, 2013


At the last meeting of the City Council (August 20, 2013) they passed the smart meter resolution. There was also on the agenda an item for a resolution to approve the 2014 Street Lighting Schedule of Fees. This item was delayed until sometime in September.


Let me get this straight. This is an expense that is covered by the services paid for by property taxes. Now the City Council wants to take it out of their expense budget and bill it directly to the taxpayers through the MLGW billing process. If you will look on the back of your MLGW bill you will see that you are already being billed directly for the following.


  • Sewer Fee (Memphis)
  • Solid Waste Fee (Memphis)
  • Storm Water Fee (Memphis)
  • Mosquito/Rodent Control Fee (Shelby County)


Now they want to put a street lighting fee on your bill directly instead of raising your property taxes.



How Much Annual Sick Leave Does Your Employer Give You?

Thursday, August 29th, 2013

August 29, 2013

This review of the Shelby County Efficiency Report is fascinating and reveals many areas of substantial savings that are possible not only in county government but immensely more in the less efficient City government and the school system.

Here are the facts that are revealed in the report.

Median sick days per year

Private sector                                                                    6 days per year

State and local governments                                      12 days per year

Shelby County, City of Memphis, MLGW               12 to 30 days per year depending on longevity

Like any kind of paid leave, sick leave can drive overtime expenses by creating vacancies that must be filled or work backlogs that must be reduced by employees working overtime. Also they allow unlimited carryover of sick leave from year to year. A revised policy of use it or lose each year would save a huge amount of money. This is what most of the private sector does. Why should the public sector get something that is not common in the private taxpaying sector?

Looking at the County overtime expenditures in 2012, it amounted to almost $12 million dollars. It is time we put an end to this sick leave boondoggle. All local governments should go to a paid time off approach (paid time off to include vacations, holidays, sick days, personnel days etc.) that matches the private sector average, not the inflated public sector model.