ORDER-2019-64 : Transfer of $169,103 from Account #019142-549201, Health Insurance, to various Accounts as set forth herein

Transcript (~17 min @ 1:48)

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▶ 1:50 Manisha Bewtra: thank you public comments now closed there's one order before us this evening order 2019 desk 64 transfer of one hundred and sixty nine thousand dollars and one hundred one hundred and sixty nine thousand one hundred and three dollars from account number zero one nine one four two five four nine two zero one health insurance to various accounts as set forth herein is there a motion to suspend the rules so we can bring miss Marianne long director of human resources to provide comment so move second great the rules are now

▶ 2:23 Speaker 3: suspended thank you for being here tonight miss long thank you very much the reason that I'm before you tonight is I am requesting a transfer of funds from our health insurance budget to two other accounts one in workers compensation medical another in workers compensation expenses another in physical exams and let me begin by talking about the workers comp benefits line item you may remember in FY 2019 department heads were asked to reduce our budgets if we were able to and I looked at the trends over the previous several years and it appeared that I could make some small adjustments to those budgets the workers cup comp benefits budget was reduced by 15,000 the workers comp medical was reduced by 10,000 so keep that in mind the reason that we have a need in workers comp benefits in particular is due to a fatal on-the-job injury and the city has three long-term recipients now whereas we had only two long-term recipients and the reason we have a third is the spouse the spouse of our employee who died on the job is now entitled to workers compensation benefits for the rest of her life as long as she remains unmarried so that has increased the benefits portion or the compensation portion and that's in accordance with chapter 152 section 31 and the medical expenses obviously they are they are continuing to come in invoices are continuing to come into my department they are obviously very high hence the need within workers compensation budget in physical exams again if you were to look at the physical exam account across several years it has been level funded we've had an unprecedented number of retirements really truthfully throughout the city but in particular within the fire department and the Department of Public Works and these pre-employment exams particularly with public safety are required by the Commonwealth of Massachusetts medical drug and alcohol as well as psychological so I to date have sent in this last round of hiring a total of nine employees for these exams six of whom were for public safety specifically fire department and three were DPW now I have to say that of those three that we've sent one we withdrew our offer of employment they failed the pre-employment tests and to withdrew their candidacy so I have sent candidates for these exams the vacancies still exist I will now have to send another three for these exams just to keep it in mind so that in it in a nutshell is why we have this request is before you to transfer funds now let's talk briefly about the health insurance budget which we're transferring from here with me one moment so in FY 19 we budgeted 10.1 approximately million dollars for health insurance this was determined by March 1st 2018 enrollment stats with FY 19 actual rates so again we took a snapshot on one day of enrollment and applied the July 1 rates to that enrollment and we also had five vacancies within the school department we budgeted for that as well you may or may not remember the FY 19 health insurance budget was reduced by approximately three hundred thousand dollars or two point six two percent from FY 18 which obviously is is a positive the amount that we placed in the insurance budget approximately two hundred thousand represents less than two percent of the overall health insurance budget we felt that that was prudent and fiscally responsible to do and then lastly I'd like to say that according to our CFO transferring from existing accounts one employee benefits account to another as an example is fiscally more prudent than using free cash particularly in our city where departmental capital equipment requests as an example are in need of funding free cash is available in for those types of circumstances so long way of saying the money exists within the health insurance budget it is available for transfer into workers comp and physical exams any alderman wishing to

▶ 8:23 Michael P. Zwirko: speak on this one discussion Thank You madam chair a few questions for you this evening miss long thank you for being here this evening to answer these questions the workman's compensation benefit plan that's self-funded correct yes it is so is that that's why these these figures are generally as large we don't see shifts like this generally it's obviously do yes this the only self-funded plan I think we have is that life insurance itself actually all of

▶ 8:51 Speaker 3: our benefit plans are considered self-funded for instance unemployment is also self-funded life insurance we do pay premiums to Boston Mutual but again when they give us rates we base those rates on existing enrollment but we never know if enrollment is going to increase throughout the year but so technically yes they're they're self-funded okay and we're currently in

▶ 9:19 Michael P. Zwirko: the enrollment period right now right that ends on May 1st yes so this is the period of the year where the employees can choose to enroll in a plan change their plan it's kind of yes the market for them many transactions yes so in

▶ 9:34 Speaker 3: other words people can change a plan to a new health insurance plan if they've had a change in status in their family a spouse may have lost a job well that's a qualifying event you could do that outside of open enrollment but yes it's the opportunity for our employees to make any type of changes or to enroll in benefits open enrollment period and I bring that up because in your memo you

▶ 10:01 Michael P. Zwirko: talk about the enrollment you talk about in the 2019 budget hearing which actually I went back and watched recently and it's talking about two hundred thousand dollars that were given to the two most expensive plans were allowing enrollment for the first time in several years and just to recap you had stated last year at the time that the GIC had frozen three plans for a long period of time to yes could you talk about that once more just because I think it's gonna help explain as to why the city thought that it was prudent in

▶ 10:34 Speaker 3: order to yes money I'd be happy to so the group Insurance Commission over a several year period I believe it was at least three years they froze enrollment with Harvard Pilgrim Independence Plan as well as Tufts Navigator Plan. And the reason that the GIC did that is because their rates were increasing in a way that the other plans were not. Their claims were higher. So the Group Insurance Commission was obviously negotiating with these two vendors and they froze enrollment in as a way of capping that expense those are the two highest enrollment plans in Melrose and talking to a few of my colleagues this isn't a scientific thing but in speaking with a few of my HR colleagues it's the highest enrollment in their communities as well they're broad network plans rich benefits go into Mass General etc so because that because enrollment had been frozen and it's a desirable plan we anticipated in FY 19 when they unfroze enrollment and they allowed people to go back onto that plan we anticipated a migration back you know to these more expensive plans so that's why we decided to increase the budget by approximately 2% in the event of when the budget comes down before you before the Board of Aldermen we don't have all of the statistics and transactions reconciled with open enrollment it's not possible truthfully for us to do that and and

▶ 12:29 Michael P. Zwirko: what exactly was the migration result I actually don't know the answer to that

▶ 12:37 Michael P. Zwirko: right now okay but we know that it was less to cover this that's why there's this buffer money left over so the migration didn't actually eat into that two hundred thousand that you boosted in the line item I understand your

▶ 12:49 Speaker 3: question however it isn't that simple that's one aspect of changes that may occur and again and employees get married they get divorced they retire they have children any number of things causes fluctuations in our insurance budget it's it is for lack of a better word it is a fluid budget and I always refer to it as taking snapshots on one particular day we traditionally try to use March 1 2019 enrollment stats consistently so it you know also I I forgot the opt-out program as an example I believe in FY 19 when I came before you for my budget hearing we had a hundred and six people enrolled in opt-out now we have a hundred and twenty two so it's not just whether that migration occurred or didn't occur it's a number of right but I was reading from

▶ 14:00 Michael P. Zwirko: your memo so it says we did not have the migration to these expensive plans as we anticipated so my assumption is reading your memo that the $200,000 that was allocated to provide a buffer for these migrations didn't occur when you said we did not have the migration to these expenses plans as we anticipated well

▶ 14:17 Speaker 3: yes however a lot of other things were happening as well so whether I can say it's one or many it's a fluid budget I guess is my purpose in that long explanation we take snapshots of a budget that is ever-changing and then it

▶ 14:35 Michael P. Zwirko: reads given this the funds are now available so I just know that over the past couple of fiscal years starting in 2016 there's been over 1 million dollars that have been transferred out of this line item this this fund and this year again now we're transferring out a hundred nearly a hundred and seventy thousand so there was a comment that you made that was stated by the CFO about whether or not free cash could be used for this in my opinion I think if that two hundred thousand dollars was instead put into the general fund it wouldn't necessarily become free cash and we could budget that two hundred thousand dollars accordingly it could be positions it could go to paying and helping with some revolving accounts or reserve accounts so I understand that we need to make this transfer and I'm happy to make this transfer I don't think that it should come from this account I can't support the transfer this way so I will be voting against this but I do understand that these funds should be available it should not come from here so I appreciate your time tonight those

▶ 15:44 John N. Tramontozzi: are all the questions I had madam chair any further questions thank you I am NOT a voting member of this committee but I appreciate the courtesy of asking a question sure I just just for a little bit of clarification yes you on the workers comp benefits as a result of the fatal death that occurred but unfortunate and sad yes that we had I just wanted to clarify that you mentioned about the spousal death benefit until the spouses own death or remarriage that benefit is a result of state statute not necessarily is a a result of any ordinance of the city when it comes to that is that right that

▶ 16:22 Speaker 3: is correct yes yes yes and we're required under this that is correct by

▶ 16:32 Manisha Bewtra: that benefit thank you yes thank you um thank you miss long for being here I you know at the center of your role is human resources I think we talked a lot about transferring funds and I think when I saw you know the line items here in particular increased due to fatal on-the-job injury it really struck me how how much human humanity and human human resources that is at the core of what we're really talking about so I wanted to take a minute to recognize we did this last year but DPW day is coming up and it's been several months since John Doherty passed away and I wanted to take a minute to again read some of your statement from last September regarding his contributions to the city he was a Parks and Forestry division division foreman and he has made significant contributions to our parks our playing field fields the grounds of our schools and municipal buildings our tree canopy and he's very instrument he was very instrumental in helping up Melrose be the beautiful place that it is I think one of the things you had noted is his passion for DPW day so I wanted to just take a minute to plug that in his honor it's coming up on May 16th I like have too many papers right laying around here apologize May 16th 830 to 12 at 72 Tremont and there will be trucks equipment demonstrations bounce houses snacks and fun again when folks attend that this year please remember the contributions mr. Doherty made to our community and thank you so much for being here tonight you're welcome thank you is there a motion to recommend for

▶ 18:23 Scott M. Forbes: passage recommend order to zero one nine six four second all in favor aye aye so