04-26-1993 Council Packet - Laserfiche WebLink

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of ^hluusl^^;4 ( ifiis I i \inut<»n Aviriiu* Norih SI. I'aul. MN 5^1 :<» (f»12) l*Mi Atlfeon Alert !M>R’ 2 e jses April 23, 1993 TO: FROM: Managers, Administrators 4 Clerks (be sure your mayor gets a copy immediately) Jim Miller Contact your lagislatora inaiodiataly and tall tham 8F629, providing for arbitration of haalth inauranca banafits for ratirad aasantial amployaas is a mandata that citias cannot afford in timas whan citizans, tha govarnor and lagisiatora ara axpacting city ang>loyniant costs to ba containad. The bill would allow non-elected, temporary arbitrators to create large local government obligations without providing any additional service to the public. If the bill is passed, units of essential employees can take the issue of post-retirement health insurance to arbitrators to decide. In a relatively short period of time, arbitrators will undoubtedly begin imposing the health care benefit. As more and more units get post-retirement health insurance, arbitrators will begin to regard these benefits as a standard, just as active en^loyee health insu.~ance is todr -. This bill will have several very costly implications, if adopted. o Arbitrators will continue to award benefits to those already retired who currently have other arrangements or have not previously obtained coverage, in addition to newly retired employees. o Adding retirees to any group will probably adversely affect the premiums for that entire group. Within the context of exponentially rising health care premiums, this could be a financially disastrous impact. e Some cities allow the use of unused sick lea.e to purchase health insurance during retirement as an incentive to not abuse sick leave during years of employment. Obviously, that type of program would be subverted by this bill, e Finally, if local governments lose control of the decision to provide health insurance to retirees, an immediate provision should be made for funding these post-retirement obligations during the working life of the essential employee, as is currently done for other retirement benefits. The Government Accounting Standards Board, for example, now requires reporting such post-retirement health care commitments as an obligation of the entity. Without an off-setting reserve funded through payroll dA ’< '“tions, showing the liability could ha.’r an adverse impact on the c 3* financial statements. I^t your l<qi«l«tor know * crucial to your city and that • vof for thx« toill a vof for higliT co»£S and nigW pg^rty tytaa. It xa iikaiy that final action will ba tafcan on thin Dill in ^a Houaa naat want, so coniact your rapraaantativa liwiadiaiaiv and vonr r ana tor within tiia naat £aw days. - - - - - - - - - - - - - - - - - - - - - -—’