AGENDA #4m

MEMORANDUM

TO:	Mayor and Town Council
FROM:	Mayor’s Committee on Health Care
SUBJECT:	Ordinance Amendment on Health Insurance
DATE:	June 9, 2008

PURPOSE

The attached Ordinance amendment would amend healthcare eligibility for members of the Town Council. 

BACKGROUND

During the March 26, 2008 Budget Public Forum,  Council Member Bill Thorpe petitioned the Council to compare benefits that elected officials from other governments receive with benefits that members of the Chapel Hill Town Council receive.  Council Member Thorpe’s petition was referred to the Council. 

In response to Council Member Thorpe’s petition the Mayor created a Committee on Health Care to look at this information and to bring back a recommendation for the Council to consider. The Mayor requested that a survey be conducted using neighboring local government organizations, on the subject of whether those organizations considered the Mayor and Council as eligible for participation in the group health insurance plan, on what basis costs were allocated and under what conditions eligibility for participation was extended past the term of active service.  The survey is enclosed (Attachment 1). 

DISCUSSION

In 2003, the Council made access to the Town’s health care plan available to elected officials but continuation coverage was not an option at that time.  .  Under the current “Group Health Plan” ordinance as amended in 2003 (Sec. 14-59 of the Town Code of Ordinances), “eligibility for participation in this coverage shall cease with the expiration of the term of office”. On May 22, 2008 the Committee met and discussed different options regarding continuation health care benefits 

Changes in the health care industry since the ordinance was amended in 2003 have made it more difficult for members of a group plan to obtain new coverage upon leaving a group.  Pre-existing conditions make anytime on a group plan a serious liability because one is left to pay cost prohibitive premiums if and when they are no longer eligible to be on the plan and have to secure new coverage.  Serving on the Chapel Hill Town Council requires the investment of significant time and energy.  Some  Council Members have determined that in order to be keep up with the demands of serving on the council part time employment (which many times make them ineligible for health care benefits through other employers) is their only option.

RECOMMENDATION

For these reasons, the Committee recommends the Council enact the attached ordinance Amendment, which would provide extension of health benefits to members of the Council after the member completes two full terms of office. 

ATTACHMENTS

1. Survey (p.4).