Fire and Police Health Fund Bill 2007

(This report is from Henry Trevino, Retired SA Fire Dept and Retiree Representative of the Pre-funded Health Care Fund. Thank you, Henry)

Again, before giving false hope or erroneous information, we waited to the last minute of the last hour of the last day to determine for sure that the very hard fought for Fire and Police Health Fund Bill had at last been enacted into law. Years of very hard work by so many good people had finally become a reality. The Fire and Police Health Fund Bill was enacted into law on June the 15th. 2007.

The enactment of this Bill will trigger four major changes to the Fire and police Health Fund.

The first major change is the empowerment of the Board of the Fund. The Bill empowers the Board to create and administer a financially sound health care plan and adjust contributions and benefits, within the framework of the statue, for the well being and financial health of the Fund.

The second major change will increase contributions to the Fund by the active Fire Fighters and Police Officers and the City.

The third major change will increase Retiree’s out-of-pocket and deductible expenses.

The fourth major change provided in the Bill is that it will protect the fund’s actuarial soundness. After ten years, in the event the Fund has not achieved its goal of less than thirty years of unfunded actuarial liability, the Bill would institute an across the board mandatory annual increase in contributions, out-of-pocket and deductibles.

The active Fire Fighters and Police Officers will see the first changes on October 1, 2007. Their total contributions to the Fund are going to be 2.00%. Actually, this initial increase will be .5% from what the Actives are now paying. There will be four additional increases after October1, 2007. The next three years will see increases of .7% each year. The fifth year will see an increase of .6%. These increases will bring up the total contributions by the Actives to 4.7%. The City’s total contributions will be 9.4%.

The contributions from the City and the Actives will be based on a true one third-two thirds basis. This means that as the contributions of the actives increase so will the City’s. In the past, the City was contributing different amounts for the Fire fighters and the Police Officers. The fire Fighters and the Police Officers were also contributing different amounts. Now the contributions of all entities will be based on a true one third/two thirds formula. As stated previously, the final percent contribution of the Actives will be 4.7%. The final percent contribution by the City will be 9.4%. As the actives receive salary raises, so will the contributions increase by the same percentage for both the Actives and the City, thereby keeping the contributions true to the one third/two thirds ratio. This is the way contributions are now structured in our pension system.

On January 1, 2008 the maximum deductible for each individual Retiree in a calendar year will increase from $200.00 to $500.00. The maximum out-of-pocket for each Retiree will increase to $1,000.00. The total maximum out of pocket will increase $100.00 per year starting on January 1, 2009 and will continue for the next three years eventually bringing the total to $1,400.00. The deductible will stay at $500.00. When all the increases are factored in at the end of five years the total responsibility of the member will be $1,900.00 per year.

One other change that is worthy of note is the impact on early retirees. Any active member retiring before completing thirty years of service will have to continue paying contributions until such time as they would have retired with thirty years. In other words, if a firefighter retires at 25 years of service, they would continue to pay what all other firefighters are paying for another 5 years to make up to the thirty year mark.

The Fire and Police Health Fund Board will be looking at many avenues where cost savings can be initiated. Wellness programs, health information, prescription programs, and other cost saving initiatives. Working committees are now being formed to work on the Plan Document and the Schedule of Benefits. If any changes are made to any part of the Fund they will only be made within the framework of the statute keeping uppermost in our minds the impact it will have on the beneficiaries of the Fund.

Making the submission and passing of this Health Fund Bill was the result of many people and four different entities coming together, not only agreeing that the Fund was indeed in trouble, but providing solutions to fix the problem. Many long hours were invested into making this bill a reality. There were innumerable numbers of people that worked in the back ground, people that never received notice or public thanks. To all these good people, we owe a large token of gratitude. They voluntarily dedicated themselves to insuring that the Health Fund would survive and provide health care to its present members and all members yet to come. Thank you for giving so much of your time and energy so that the Health Fund could provide health care for many, many years into the future.

I urge all the Retirees to attend the monthly retiree’s meeting. Stay abreast of events that impact all Retirees. Meet with your old friends and re-fight a few of the most notable fires. Meetings are held at the Pension Office on Roosevelt St. on the 2nd Tuesday of every month at 1:30 P.M.

Henry Trevino, (Retired SA Fire Dept)
Retiree Represetative
Pre-Funded Health Care Fund