Editor’s note: Prior to their meeting, LaFleur provided the mayor with a set of questions. Where appropriate, these questions are inserted in brackets [ ].
[Question One: If former Academy of Music employee Mr. Robinson is collecting unemployment and therefore actively seeking employment as a requirement for collecting such funds, does this mean that he has not retired directly from city service and has therefore voided his eligibility for group health insurance benefits through the city? If he was not classified as a city employee why was he eligible for such benefits?]
Daryl G. LaFleur: I’m here with Northampton mayor Clare Higgins to discuss group health insurance benefits policy. I guess I’ll start with number one.
Mayor Mary Clare Higgins: Well thank you. Let me see if I get where you’re going here… I’m not sure I do, and I may not go in order on your questions, because this is a lot of data crunching, and we didn’t have time to do all this data crunching. If you want to file a Freedom of Information Act request, then we’ll have to do it, but I think I can get to what you’re trying to get to without making the city employees go through a lot of extra data crunching.
So, on the first question which is about an Academy of Music employee. I’m uncomfortable speaking about any particular employee. I don’t know if any employee, city or not, is actively seeking employment. They may be. They don’t report to us; they report to the unemployment office, so I can’t speak to that question.
The other question. [If he was not classified as a city employee why was he eligible for such benefits?] We have a policy now that you have to retire directly from the city in order to receive health insurance benefits. There is one employee who we have filed a Home Rule Petition to allow them to be a retiree. Until they are given permission from the state and fulfill the requirements of the Home Rule Petition they are not eligible to be a retiree. Under our health insurance if they become eligible to be a retiree then they will have an opportunity to enroll in the health insurance because our policy says “any change in condition.”
And let me give you another example, somebody, for instance, gets married, that’s a change so they get to change their health insurance. Or if they have a baby, that’s a change. Or if they have a divorce. Or they go from being a part time person to a full time person they can then enroll. Part time meaning under twenty hours where they are not eligible. So if somebody was not a retiree and then was able to be a retiree that would be a “change in condition.” And he would then be allowed to enroll in the health insurance. Does that, does that make sense to you?
D: I’m following what you say. I will have to listen to it again on the tape…
M: Okay. It’s helpful if you can ask me clarifying questions so I make sure I’m really clear.
D: Sure.
M: Okay. So if you want to think about that for a minute and see if there is anything that comes up for you. I mean basically what I’m saying is that he’s not eligible for health insurance because he’s not a retiree unless he had Cobra-d it.
D: But you’re not speaking about Mr. Robinson.
M: I’m talking about anybody who’s not eligible for retirement would not be eligible for retiree health benefits. If somebody becomes eligible for retirement, then they become eligible for retiree health benefits. And [in] the case of the position at the Academy of Music we filed a specific Home Rule Petition to allow that person to become eligible for retirement. If that petition passes, and he fulfills the requirement…
D: Right, right, I understand that, but the purpose of my question which you already said that you weren’t going to address: it was my understanding that if someone was collecting unemployment they are only allowed to do so if they are actually seeking employment.
M: Right, and that’s…
D: … That means they are not retiring; that was the purpose of the question.
M: But anybody who’s collecting unemployment, the Unemployment Office is the person who follows up to see whether or not they are looking for work. That’s none of our business. And as an aside, I would mention that my mother, who got laid off when she was 72 years old, was allowed to collect both unemployment and her retirement.
D: That’s very interesting. That’s in New York or…
M: Yes, so…
D: Yeah. Because what you said at the meeting was that Mr. Robinson is on Unemployment.
M: That’s my understanding, and he may or may not be seeking employment. I have no earthly idea.
D: Right. Of course.
M: Okay, and the other…
D: And again… the point of the question was if he’s seeking employment, he’s not retiring.
M: Well, actually I have to say, and this is a question of law, I think someone could get laid off by us, be eligible for unemployment, but also be eligible for retirement, collect the retirement and continue to look for work.
D: You may be right, I don’t know.
M: Because our collecting retirement is an entitlement, it doesn’t have anything to do with them, whether you can still work and collect that retirement. You don’t have to not work…
D: Oh, like Social Security…
M: Yeah. You can still work. So lots of folks collect retirement and still work.
D: So they can retire…
M: And continue to work somewhere else.
D: They can retire, work somewhere else and still maintain their eligibility for group health insurance.
M: Absolutely. If they took the health insurance when they retired. Absolutely.
D: As long as they were using the health insurance.
M: Before they retire, before they left, correct.
D: Okay.
M: Okay?
D: Um, yeah, like I said I’ll have to listen to the tape…
M: All right. And before you actually write it, if more questions come up, Daryl, it would be really helpful to me to call if you have more questions.
D: I will.
M: Okay?
D: I will do that.
M: Great. And your question was, um Cobra. Anybody that gets laid off, or separated from city service for any reason even if they are fired has a right to Cobra their health insurance under the federal law.
[Question Two: If he is utilizing a COBRA plan does that exempt him and others who might utilize COBRA from the continuous service provision of the new policy?]
D: Mmhm.
M: So we don’t do anything that’s outside the federal law.
D: No, I understand that. I guess the point was if they are collecting, if they’re using Cobra for health insurance, and they were retiring…
M: They are still on our plan then…
D: They haven’t discontinued the plan.
M: So…they are still on our plan.
D: So…the continuous service provision would still be…
M: Right, but … lets say my retirement date is May 1st and I leave on May 1st there is no need for me to Cobra because I’m still eligible for the city’s retirement.
D: Right.
M: City health insurance.
D: But if somebody is Cobra-ing, they are continuing the coverage….
M: Absolutely, they’re still on our plan. But as a practical matter nobody who is retiring would choose Cobra because they are eligible to stay right on the plan.
D: Right. I guess that would come into play if somebody, again I was referring back to Mr. Robinson, if he was actively seeking employment and not retiring non-Cobra, you can see where it gets a little confusing to have to follow…
M: I can’t divulge anybody’s status on any of that stuff. So, if you’re asking a theoretical question about, if somebody’s laid off, and they are actively seeking employment, and they have chosen to Cobra [for] their benefits and then for some reason they became eligible for retirement, certainly they would be on our plan and would continue. If somebody is laid off, and whether or not they are actively seeking employment, and then becomes eligible for retirement, and may have gone off our plan still the act of becoming eligible for retirement is a change in condition and then they then get to enroll.
D: And how does one become eligible for retirement?
M: By being vested in the system and that means…
D: The pension system?
M: The pension system. Right. And so if you look at the Home Rule Petition, it was clear that anybody who would be effected by it — it was one person in this case — would have to buy back their time to be vested in the pension system.
D: Right.
M: And to be vested in the pension system you have to have ten years in the system.
D: Okay.
M: Okay? So then you also wanted to know…
[Question Three: How many people that previously worked for the city for ten or more years and left were eligible for health insurance at retirement under the terms of the old entitlement? What were their ages and dates of service?]
I don’t have the exact number, but I know that we had a number of people, and I don’t know the universe of people but we sent a letter to, there is nobody since 2004 when we changed the policy, that we, we’ve notified everybody whose walked out the door as of 2004, and the policy is dated…
D: 2005?
M: 2005, sorry, but we notified everybody. Before that we also sent a letter to everybody who had ten years in the system who was not, who would have maybe expected they would have been eligible under the previous practice.
D: Is there a, can I get a copy of that letter and when it was sent?
M: We can probably get you a copy. I have to check with Glenda where it is. I don’t have a copy because it wasn’t sent to me.
D: Mmhm. Right.
M: We also put out a memo that I think department heads got, and they posted in all the offices. In addition, the retirement board sent out a newsletter just noting that was a change and saying to people before they made a decision about retirement they should go talk to Human Resources. So I feel that current employees have been adequately notified about the fact that there is a change, and also any time somebody is leaving they always check in with various offices.
D: So you say that there was a letter sent, that letter was sent to anyone who was leaving…
M: Who had left with ten years or more and I don’t remember the exact number but Glenda sent out a letter to everybody.
D: Now, when I spoke with Glenda she said there was no follow up after…
M: Well, there didn’t need to be follow up. If people responded, there was one or two people who responded to us and we talked to them, but…
D: But what I’m saying is, she indicated there was no follow up from when the department heads were notified…
M: Sure…
D: …to whether they actually, and that’s a question further down here…
M: I can’t answer that…
D: …to whether they actually followed up and notified, and at least one department head that I spoke with indicated not receiving any policy change.
[Question Eleven: Since our last interview, how have you ensured that every current employee, retiree and past employee has been duly notified of the new policy? A department head I called and left a message for has not returned my call for verification. Human Resources Director Glenda Stoddard indicated that there was no follow up as of the date of our original interviews.]
M: But as a practical matter, we give lots of things to department heads to post about lots of things. They are supposed to post them. Does everyone always get it right? No, but as a practical matter, at this point, when anybody retires, if they go to the retirement board which they all do, the retirement board tells them to check with HR about their health insurance benefits before they leave. So yes, while people may not have actually read it on a bulletin board, because maybe some department head missed it, as a practical matter, we ask everybody to check in both of those offices. You can’t just walk out the door.
D: Mmhm.
M: …you have to talk to both of those departments before you retire, so if that…
D: But there hasn’t been any follow up with, through your office, through the office of human resources, to the department heads…
M: To do what?
D: …to double-check to make sure that they made sure all their employees were aware of the plan.
M: That’s right: we didn’t because we know that everybody has to come in and check with us.
D: The reason that I ask this question is I know that whenever my insurance changes my personal insurance, I receive a notice in the mail. Whenever my credit card policy changes, even one sentence, I get a notice in the mail. I ask this question because it seems to me that would be a reasonable undertaking to follow to notify current and past employees and retirees. What you’re saying is that you feel, I’m just paraphrasing, that you feel it’s adequate that the department heads are notified and that the retirees or past employees all need to go through the retirement board and or human resources department and that they would be told then.
M: That’s right.
D That’s what you are saying, and so you feel like that’s…
M: That’s right. But we also notify everybody when there’s any change in insurance I mean
we’re no different then your insurance, if-if there is any change in benefits, we notify people. We notify people. We’re in quite good contact with….
D: And that’s what this was, a change in benefits.
M: No, it wasn’t a change in benefits in terms of the insurance, it was a change in who was covered. And quite frankly, it’s not clear to me that there ever was a written policy. Other communities have the same policy that we now have. There’s two levels of discussion here, Daryl, and I’m hearing that you’re very concerned about the procedural level. I’m curious about your point of view about the actual policy change, because we see it as something that’s very important to protect taxpayers from an open-ended entitlement. I’m not sure where you are on that question.
D: Well that’s irrelevant where I am.
M: Why?
D: Because I’m not the mayor of the city that’s implementing the policy.
M: But you must have an opinion about it because it…
D: Well I’m still forming my opinion as I’m trying to establish exactly what has gone on here…
M: And you’re talking about procedure.
D: Right, that’s right I’m talking about procedure. And my goal is to establish whether everyone that works for the city, has worked for the city, or retired from the city was duly notified of this.
M: I know that we notified everybody in writing who had ten years or more in the plan who was incurring on our health insurance. We notified them that that change was going to happen.
D: Okay.
M: Everybody who gets the Retirement Board newsletter, which is, that means everybody who is vested in the system got a blurb in that saying there were policy changes happening and that you, before you make any decisions about your retirement or your health insurance you need to talk to us in HR. That’s every employee got that. In addition, it was posted department heads posted that, maybe one or two missed it, I can’t guarantee that 100% got it, but in addition it was posted by department heads, and then in addition to that every person that makes a decision about separation from service or retirement talks to at a minimum HR and if they are actually retiring, they talk to the Retirement Department and HR and they are notified at that point as well.
D: Sure.
M: So, I believe that we have covered everybody. So then, you know, you’re talking about notifying about a policy. Well the bottom line question is why did we change the policy? I mean, yeah we have to make sure that we have to notify everybody, I think we’ve done that, I think we’ve gotten there. And I think it’s one of those things as well, people hear something in the abstract but it doesn’t mean anything to them until they’re ready to retire or move on to a different job.
D: Right. And in this case what I guess I was looking for, and the reason I presented these, and I realize you were gone for a few weeks, was there isn’t any actual evidence that every one has been notified.
M Well, we know that the retirement board newsletter went out to everybody that said that the uh…
D: So the 300 or so retirees…
M: No it goes to every active employee…
D: So the retirement board newsletter goes to…
M: They do a once a year notice that says “here is the performance in the retirement system, here is what just happened in the retirement system this year.” They made a note in that to everybody that the policy had changed. So that everybody that is vested in the retirement, current employees who were paying in to the system and retirees were notified through that method, so I think that was…
D: So, you just said the policy changed.
M: Right.
D: And a few minutes ago you said, “well the policy didn’t change but the eligibility”
M: No, no, no I’m using policy in a different way.
D: Okay.
M: Everybody who is on our insurance, they are part of our insurance policy, we have an insurance policy. Just like you have a car insurance policy.
D: Right.
M: Or a homeowner’s insurance policy and you have a health insurance policy.
D: Right.
M: Then we have city policies that effect eligibility, so I’m talking about policy in two different ways. We clarify what the eligibility is for retirees — that may be a better way to say it because there was no policy beforehand, there was never a written policy around…
D: No, there was as you describe a — what did you call it, ‘an entitlement.’
M: A practice, no, I think there was an expectation of an entitlement, but it was not an entitlement because it was not written down anywhere.
D: People may argue with that; verbal contracts are valid.
M: But…
D: When you say, as you said, “have an open ended health insurance entitlement for anybody”
M: Right…
D: Entitlement is entitlement, if you get a dictionary and look up the word.
M: Okay, but I didn’t say that until after we changed the policy, and I changed it to have a policy, and I said that as a definition of what was before. Nobody ever said before to any — I mean it was folklore that everybody got health insurance. There was no written city document that says, “Everybody gets health insurance.” Okay so, and that, in this era when we are going to be required by the federal government to quantify all of our unfunded liabilities, including the liability for retiree health insurance, was not really a good idea.
D: So how did it work then if there was no written policy?
M: People just assumed that it was the way it was, and that when…
D: But why would they assume that?
M: Because in previous years people did get it.
D: So, at some point a person who was employed by the city would make this assumption, why would they come under that belief? Was it by talking to a peer…taking to a supervisor?
M: Yeah, talking to a peer, talking to a supervisor, and in fact people who had ten years vested were getting health insurance many years later, when they retired. But as a …
D: So there was a precedent for this?
M: There was a practice, I’ve said to you, I’ve said to you repeatedly that it was a practice, it was not a policy.
D: Right, and I just said precedent.
M: Right, a practice is different than a precedent. You know we are allowed to change that policy, and we had change policies when it’s in the city’s…
D: And do you know how long this practice went on for?
M: I have no idea. We’ve changed other things that related to health insurance, too. We used to have all of our retirees on the active city plans. We don’t do that any more. They are now on a retiree plan. I mean, I guess I see my job as trying to manage the city the best way possible, and to make sure that we’re spending our money in the wisest way and make sure that we’re not giving out a benefit that quite frankly none of the taxpayers in the city have. Nobody that I know in the private sector can work somewhere for ten years and then come back at age 65 and say “I want health insurance from you until I walk off this earth.” And that doesn’t seem right to me.
D: Well, you said you had checked with other communities, and it would be interesting to know what communities you checked with.
M: Well let’s talk about the private sector for a minute. I don’t know any employer in the city, and I’ve talked to other employers in the city, that insures people who have only worked with them for ten years. If somebody retires from them, and they happen to have retiree health, which almost no private sector employees have at this point, then they might give them health insurance, but it does certainly not…
D: But in relation to the other communities that you spoke with…
M: Well, I can’t rattle them off right now. I know Amesbury is one. I’m pretty sure that has the same policy, but I can’t remember them right now, You know, Daryl, I do have a city to run…
D: That would be helpful…
M: I’m spending an enormous amount of time on this and I have a city to run here, so you’ll have to do it on my timetable. When I have time to do it I will do it.
D: That’s why I gave these three weeks ago.
M: But I was on vacation for two of those…
D: But you have a staff and whatnot, and I provided these with twenty-one day notice.
M: And my staff does a lot of work.
D: I understand that, but it’s not like I’m just walking in here off the cuff.
M: It helps me to understand why this is such a burning issue for you, if I could understand, I mean do you think we should be giving anybody who works here for more than ten years health insurance when they retire?
D: Well, what I think is irrelevant.
M: No, it’s not, because you’re asking the questions.
D: What I’m trying to establish is if everyone has been duly notified, and I’m just following up on some of the remarks that you’ve made on this issue.
M: Why is this an issue for you? That’s what I’m trying to understand, ‘cause if you tell me a really compelling reason, it might help me move this up on my to-do list.
D: Mayor, I really don’t have anything to say on that, other than I’m trying to follow up on a policy…
M: Do you think we’re treating people badly? And do you know of somebody we’ve treated badly?
D: I don’t have any commentary on that.
[Question Four: How many people that worked for the city for ten or more years and left actually returned to the city health insurance system at retirement?]
What I’m asking is, for instance, on item number four you said at the council meeting that lots of people have worked for the city for a short period of time, ten years or so, and they go somewhere else. Now you say lots of people and so my question is simply, how many people worked for the city that left and actually returned is what I’m trying…
M: That’s a very difficult number to get and would take hours and hours of staff time. If you make a Freedom of Information Act request then we will charge you for the time that it takes to do that. I can’t ask my staff to go through all that right now, there are huge things that are going on. But, I can tell you that I can think of at least, I can think off the top of my head of people I know, five or six, and if you multiply a family plan or a retiree plan over their, you know, twenty year life span after they retire, to the city that’s a lot of money.
D: I think that without having any figures to…
M: I can give you our health insurance premium cost right now.
D: When you address the city council, you simply say it’s a very costly benefit…
M: So let me give you our health insurance for seniors, for retirees. HMO Blue at an 80/20 plan, so to get the numbe,r you have to assume an inflation rate over this. I don’t have the spreadsheet to do this. For somebody on Medex it’s $380 a month times twelve divided by five times four is 4,500, we’re spending $4,500 a year for each person who is on Medex. Okay, let’s say they stay alive for twenty years. Without adjusting for inflation that’s $91,000. That’s why we need to look at this.
D So, in asking how many people, you don’t know how many people?
M I can’t give you, I, it’s, it’s very difficult, because we don’t keep the records that way, so that would be a manual search so if you want us to do it, we’re happy to do it.
D: Right, Freedom of Information…
M: But you need to do it that way because I can’t ask my staff to spend the number of hours that that would take. I can tell you that that even if it was one person had stayed alive twenty years, we would spend $91,000 not adjusted for inflation.
End of Part One
Continue Daryl LaFleur's interview with Mayor Higgins in part two (of four)…
