KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 180775 Introduction Date: 10/4/2018
Type: Ordinance Effective Date: none
Sponsor: None
Title: Amending Chapter 2, Division 8, of the Code of Ordinances entitled “Healthcare System,” consisting of Sections 2-1390 through 2-1393 by repealing and replacing it with a new Division 8, entitled “Healthcare Association” for the purpose of moving the City’s health insurance decisions from the Healthcare System Board of Trustees to a new Healthcare Association; authorizing the City Manager to file all necessary paperwork with the State of Missouri to effectuate the creation of the association; authorizing the City Manager to create and join a new multi-employer association for the purchase and management of employee health and related insurances; and establishing an effective date.

Legislation History
DateMinutesDescription
10/4/2018 Filed by the Clerk's office
10/4/2018 Referred to Finance and Governance Committee
10/10/2018 Do Pass
10/11/2018 Assigned to Third Read Calendar
10/18/2018 Passed

View Attachments
FileTypeSizeDescription
180775.pdf Authenticated 216K Authentication
180775com.docx Compared Version 28K compared version

Printer Friendly Version

ORDINANCE NO. 180775

 

Amending Chapter 2, Division 8, of the Code of Ordinances entitled “Healthcare System,” consisting of Sections 2-1390 through 2-1393 by repealing and replacing it with a new Division 8, entitled “Healthcare Association” for the purpose of moving the City’s health insurance decisions from the Healthcare System Board of Trustees to a new Healthcare Association; authorizing the City Manager to file all necessary paperwork with the State of Missouri to effectuate the creation of the association; authorizing the City Manager to create and join a new multi-employer association for the purchase and management of employee health and related insurances; and establishing an effective date.

 

WHEREAS, the City’s current health, dental and vision insurance is handled by the Mayor-appointed Healthcare System Board of Trustees (“the Trust”) pursuant to Sections 2-1390 through 2-1394 of the Code of Ordinance; and

 

WHEREAS, the Trust has the responsibility to contract for the best quality health benefits to City employees and retirees at the most efficient possible cost; and

 

WHEREAS, the rising costs of healthcare and pharmaceuticals, in particular, has caused the Trust to further explore options for maintaining and improving the current quality of health benefits while controlling cost increases to the City, its employees and retirees; and

 

WHEREAS, the Trust believes, and industry practice shows, that adding to the number of members in a particular health plan will provide a benefit in terms of higher possible discounts through better health plan purchasing power; and

 

WHEREAS, Section 537.620, RSMo, allows for the creation of a multi-employer association comprised of any three or more political subdivisions for the purpose of providing insurance benefits to their respective employees; and

 

WHEREAS, Ordinance No. 180420 authorized the City Manager and the Trust to engage other governmental entities for the purpose of determining whether they and the City should establish a multi-employer independent entity through which to provide health insurance and other benefits to their employees; and

 

WHEREAS, this new association will be filed with the State of Missouri to run as an independent non-profit association to provide health benefits to its members; and

 

WHEREAS, the existing composition of Trust members will be transferred to the new association’s Articles of Association and Bylaws; NOW, THEREFORE,

 

 

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 2, Division 8, of the Code of Ordinances entitled “Healthcare System,” consisting of Sections 2-1390 through 2-1393 is hereby amended by repealing and replacing it with a new Division 8, entitled “Healthcare Association,” consisting of Sections 2-1390 through 2-1394, said sections to read as follows:

 

Sec. 2-1390. Healthcare System Health Association.

 

(a) The City shall be part of a multi-party insurance association established pursuant to Section 537.620, RSMO. The association shall manage and direct the affairs of the City’s healthcare and related benefits consistent with its Articles of Association and Bylaws. The board of directors of the association shall consist of at least 11 members appointed by the mayor as follows:

 

(1)               Two members of the city council, to serve during their term of office.

 

(2)               The city manager or designee.

 

(3)               Two members of Local 500 of the American Federation of State, County and Municipal Employees, one of whom shall be an active employee and one of whom shall be a retiree designated by Local 500 for appointment.

 

(4)               Two members from each of the unions representing employees of the fire department. Local 42 of the International Association for Fire Fighters shall designate two members for appointment, one of whom shall be an active employee and one of whom shall be a retiree; Local 3808 of the International Association for Fire Fighters shall designate two members for appointment, one of whom shall be an active employee and one of whom shall be a retiree.

 

(5)               Two non-unionized city employees, one of whom shall be an active employee and one of whom shall be a retiree selected from a group of at least three active and a group of at least three retired employees recommended by the city manager to the mayor for appointment.

 

In the event that the mayor of Kansas City, Missouri determines that one or more of the members designated by the employee groups are unable or unfit to serve, then the affected employee group shall provide another name or names as provided for above

 

The board of directors shall elect from among its members a chair and a vice-chair.

 

In the event that new members join this association, the board may make recommendations to the city council to amend the composition of the board of directors to provide for comparable board representation from such joining entities.

 

The terms of the directors shall be established in the association’s Articles of Association and Bylaws.

 

(b) Ex-officio membership. The director of human resources and director of finance shall serve as ex-officio members of the Board of Directors. They shall be entitled to attend and participate in any meeting of the board but shall not be authorized to vote, except on the matter of the withdrawal of a founding member or on any matter unless the members present and casting votes are equally divided. Ex-officio members shall not be included within the total membership for purposes of determining the existence of a quorum.

 

(c) Determination of benefits. The association shall have the exclusive right, subject to the availability of sufficient funds within the association’s funds, to prescribe the healthcare benefits to be included within any healthcare plan offered to city employees and retirees and consistent with any approved labor agreements.

 

(d) Investments.

 

(1)               The association shall be trustee of all of its funds and shall have full power to invest and reinvest them. Investments may include, but are not limited to, bonds of the United States government, State of Missouri, municipal corporations including school districts, corporate bonds, real estate mortgages, common and preferred stocks.

 

(2)               No director or association member shall have any direct interest in the gains or profits of any investment made by the board of directors.

 

(e) Professional services.

 

(1)               The association may engage investment, safekeeping, advisory, legal and other professional services as it deems necessary.

 

(2)               At least every five years, an actuarial analysis of the association shall be conducted. Results shall be reported to the city council, together with recommendations to maintain the system on a sound actuarial basis.

 

(f) Regulations. The association shall have the exclusive right to prescribe such rules, regulations, forms and procedures as are necessary to administer the healthcare system.

 

(g) Day-to-day administration. The association shall appoint an administrator of the healthcare system. The administrator may be an active city employee. The administrator shall attend all meetings of the board of directors, but shall not have a vote. The administrator shall conduct the operations of the healthcare system in accordance with this division and the rules and regulations, directives and resolutions of the board of directors.

 

(h) Records and reports. The association shall maintain records of all proceedings. The administrator shall annually publish a report approved by the board of directors showing the financial transactions for the preceding year, and the financial condition of the healthcare system.

 

(i) Compensation. The directors shall be reimbursed by the association for all necessary expenses incurred for service on the board.

 

(j) Transition from current system. The board shall have the power to procure any goods and services necessary to complete the transition, provided the availability of funds.

 

Sec. 2-1391. Accounts.

 

(a) Generally. The accounting and financial records of the association shall be maintained in accordance with generally accepted accounting principles.

 

(b) Maintenance. The director of finance or the director's designee shall be authorized to maintain the accounting records and establish such ledger accounts as are necessary and appropriate.

 

(c) Payments. Payments shall be made by the director of finance only upon approval of the board of directors or in accordance with procedures specified by the association and as authorized by the administrator.

 

(d) Commingling of funds. All cash and investments arising from all sources may be commingled among the association's funds.

 

(e) Depositories. The association may establish such depositories for cash and investments as it deems necessary and appropriate.

 

Sec. 2-1392. Assignment of rights.

 

No city employee or retiree entitled to any benefit payment under the association fund shall have the right to assign, alienate, transfer, encumber, pledge, mortgage, hypothecate, anticipate, or impair in any manner the employee or retiree's legal or beneficial interest, or any interest in assets of the association, or benefits of the healthcare system. Neither the fund nor any assets thereof shall be liable for the debts of any city employee or retiree entitled to any benefits under the retirement system plan, nor be subject to attachment or execution or process of any court action or proceeding.

 

Sec. 2-1393. Preservation of healthcare trust funds.

 

(a) The assets of the association shall be held in trust by the association. All payments made by the city to the association’s funds and such other payments that are made to the association on behalf of the city and the city's employees and retirees, all contributions made by the city's employees and retirees electing to enroll in the healthcare system, and all other money or property that lawfully becomes part of the association, together with the income, gains and all other increments shall be held, managed and administered in trust.

 

(b) It shall be impossible by operation of the association or by its natural termination, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of the association or any funds contributed to the association to be used for, or diverted to purposes other than the exclusive benefit of any city employee or retiree who is enrolled in the healthcare system, prior to all obligations having been satisfied or provided for.

 

Sec. 2-1394. Reserved.

 

Section 2. That the City Manager is authorized to file all necessary paperwork with the State of Missouri to effectuate the creation of the association.

 

Section 3. That the City Manager is authorized to contract to create and join a new multi-employer association for the purchase and management of employee health and related insurances.

 

Section 4. Effective date. That Section 1 shall become effective seven days after the director of the Missouri Department of Insurance, Financial Institutions and Professional Registration has issued a license to the association under Section 537.630, RSMo.

 

________________________________________

 

Approved as to form and legality:

 

 

________________________________

Joseph A. Guarino

Assistant City Attorney