Miami-Dade County

State sides with county on healthcare reserves

Labor unions hoping to tap a Miami-Dade health-insurance reserve fund to restore county employees’ pay received news over the past few days that could make it more difficult to make their case.

A financial audit by the Miami-Dade clerk of courts didn’t find any wrongdoing by the county, but did provide new details about how the reserves work. And a letter from a state agency in Tallahassee seemed to side with the county on how much money it should keep in the fund, though the unions insist there is no clear-cut rule.

The unions argued last month that it is enough for the county to keep 30 days’ worth of money to pay insurance claims in its reserves — instead of the 60 days’ worth county administrators keep on hand. The county should use the additional money to end a concession that requires most of Miami-Dade’s nearly 26,000 employees to contribute 5 percent of their base pay toward group healthcare costs, the unions said.

Most of the county’s 10 collective-bargaining units have hit an impasse over the healthcare contribution and other benefit concessions that were supposed to end in January, but that Mayor Carlos Gimenez has asked county commissioners to extend another year. Otherwise, the mayor says the proposed 2013-14 budget, which already includes cuts to library and fire-rescue service, would require additional trims.

Responding to a question from Miami-Dade about how much it should keep in reserves, Florida Insurance Commissioner Kevin McCarty said Monday that state rules establish a standard of 60 days’ worth of insurance claims, as the county had contended.

McCarty said in a letter to Gimenez that if the county’s self-funded insurance plan does not satisfy the 60-day requirement, the insurance commissioner’s office would have to determine if the plan is “actuarially sound” — that is, if the money coming in will be enough to cover the payments going out.

“Should a self-funded health plan not meet the 60-day surplus requirement and the Office determine that reserves are not in accordance with sound actuarial principles, the plan could be determined to be deficient, at which point the Office may withdraw approval,” McCarty wrote. “Without approval, a self-funded health plan may not operate in Florida.”

But Terry Murphy, a political consultant hired by the American Federation of State, County and Municipal Employees Local 3292, which represents sanitation workers, reiterated what he told commissioners on Aug. 29: carrying 30 days’ worth of claims in reserves would not impair the fund’s solid footing because it is so large — comprising some 62,000 enrollees, he said.

“There is no hard-and-fast rule that says you must, you shall, have a 60-day reserve or else you will not have an actuarially sound plan,” Murphy said.

A 30-day reserve might require a little more analysis by the state to ensure the reserves are strong, he added, but that shouldn’t preclude the county from making a case for keeping less than a 60-day reserve.

If the county were to argue for a 30-day reserve, the state would likely ask Miami-Dade to pledge funds from elsewhere in the budget to make up for the difference, the county’s health-insurance consultant has said. Gimenez and Deputy Mayor Ed Marquez, who is also Miami-Dade’s chief financial officer, have said they would not be willing to put up the county’s general fund for that purpose.

Miami-Dade also pays for retiree benefits other than pensions — such as health care — from the trust fund, which is projected to have $81 million by the end of the month. County administrators say the fund should ideally have nearly $100 million to hit its reserves target.

Murphy said Miami-Dade should fund its retirement benefits out of a separate fund; county Budget Director Jennifer Moon told commissioners last month she would like to, but the county does not have enough money elsewhere in the budget to do so.

In Murphy’s view, his case was made stronger by the audit, released Friday by Clerk of Courts Harvey Ruvin, that showed that nearly 47 percent of the county’s funding for its self-insured health plan comes from employee premiums and contributions and retiree premiums.

That percentage is too high, Murphy said, for a county that has long paid the entire cost of insuring its employees. Most employees don’t pay premiums for themselves, only for their spouses and children, or for the highest-end coverage.

“When you look at that audit and realize that 47 percent of the revenues that support the program are being paid by the work force, I don’t know what kind of benefit this is,” Murphy said.

The audit, performed at the unions’ request by Miami Lakes accounting firm Moor Stephens Lovelace, P.A., found that the county “fairly stated” the financial position of its health-insurance plan from 2010 through 2012.

Read more Miami-Dade stories from the Miami Herald

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category