Montgomery Mayor Steven L. Reed, on Friday, vetoed a City Council ordinance attempting to intervene in the management of the City’s supplemental health insurance program for retired Medicare-eligible employees. In addition to keeping a coverage plan that includes lower premiums, little or no copays, and fewer out-of-pocket expenses for those retirees, the mayor’s veto will save the City from paying at least $6 million it would have owed providers for breach of contract, which the Council has not budgeted.
Medicare is the primary health insurance provider for the City of Montgomery’s retirees 65 and up. However, Medicare doesn’t cover all expenses. Among the state’s “Big Ten” cities, Montgomery is one of two that makes supplemental insurance coverage available to retirees to cover those additional costs, and it is the only city to offset coverage costs.
The City of Montgomery recently announced that AMWINS Group Benefits, LLC would administer the City’s supplemental health insurance beginning in January 2024. The one-year contract with AMWINS was signed and executed in September after a months-long review, conversations with City Council members during the city’s budgeting process, and talks with representatives from the City’s retiree community, including the president of the City of Montgomery Retirees Association, Lloyd Faulkner. With the new plan, the City projects $1,921,456.13 in savings compared to the 2022-2023 charge rates. The projected retiree premium savings are approximately $655,613. The projected savings enabled the City to reduce the Medicare-eligible retirees’ premium and offset the cap on tier two, three, and four drugs.
“Once it became clear that maintaining the status quo was not sustainable, I asked the City Finance Director to find a way to keep premiums and other out-of-pocket expenses for retirees from going up,” said Montgomery Mayor Steven L. Reed. “What she found was a supplemental benefit package that provides more options at a lower cost for retirees. My office has heard from many retirees who have thanked the City for making this plan available — pointing out the hundreds of dollars they will save each month for their prescriptions and treatments.”
On Tuesday, December 5, 2023, a split City Council voted to cancel the City’s contract with AMWINS. Their action, however, would leave the retirees without supplemental coverage after December 31, 2023. The City would likely be unable to return to the previous, higher-costing plan until the end of the first quarter of 2024.
“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,” said Reed. 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.”