Council upholds mayors veto, allows changes to Montgomery retiree insurance
The Montgomery City Council has upheld Mayor Steven Reed's veto of an ordinance that would have mandated council approval before any change to health insurance for city retirees 65 and older.
The council on Tuesday voted 5-4 to uphold the veto. Councilors Marche Johnson, Franetta Riley, CC Calhoun, Oronde Mitchell and Andrew Syzmanski voted in favor, while Ed Grimes, Julie Beard, Glen Pruitt and Charles Jinright voted against the measure.
Reed announced the veto Friday. The mayor said the new coverage plan will lower premiums and reduce or eliminate copays and out-of-pocket expense.
Reed said that he did not think the council properly understood the issue when they passed the ordinance that would bar him from making changes to insurance for retirees 65 and older.
“We’re always looking for the best deal for our retirees," Reed said.
While Medicare is the main health insurance for these retirees, it doesn't cover all expense. In September, the city signed a contract with AMWINS Group Benefits LLC to administer the city's supplemental insurance. That supplemental insurance is provided by United American and will kick in in January.
The city uses Blue Cross Blue Shield as its insurance administrator now and has for many years, but that service lapses in the new year. The city would not be able to sign up for Blue Cross Blue Shield to administer insurance until the end of the first quarter in 2024
If the city backed out on its contract with AMWINS in favor of Blue Cross Blue Shield, officials would have to pay the company at least $6 million for breach of contract.
Reed administration officials said that Montgomery is one of two cities its size that makes supplemental insurance available to retirees.
The contract with AMWINS will last for a year. Officials decided to move in this direction after several months of review. The city estimates that the new plan will save the city $1,921,456.13 and will save retirees a cumulative nearly $700,000.
“Even if the city can get out of its legal and financial obligations with AMWINS, there would have been a lot of confusion about what is covered and by whom when retirees head to the doctor next month,” Reed said in a news release before Tuesday's vote. "As Councilor Pruitt has said, our former employees gave the city their best for decades, and the only thing they have asked of us in return is to provide them with affordable health coverage. Unfortunately, the council’s last-minute interference put that promise at risk.”
The city is now self-insured and uses Blue Cross Blue Shield to administer its claims. This means that the city itself pays for employees and their dependents' medical claims.
Pruitt originally sponsored the legislation that would have required council approval to change insurance for retirees 65 and older at the Dec. 5 meeting, and it passed with five in favor and four against.
Pruitt said he has gotten numerous phone calls and emails from retirees expressing their displeasure with the switch in supplemental insurance.
“For us to change the playing field in the middle of the game is not very fair at all," Pruitt said.
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Alex Gladden is the Montgomery Advertiser's public safety reporter. She can be reached at agladden@gannett.com or on Twitter @gladlyalex.
This article originally appeared on Montgomery Advertiser: Council allows Montgomery mayor to make changes to retiree insurance
