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Pittsburgh May Conduct Review of Employee Health Care Costs, Eligibility of Dependents

As Pittsburgh continues to grapple with hundreds of millions of dollars in unfunded health care liability for current and former city employees, Mayor Luke Ravenstahl's administration has introduced a bill that would hire a private firm to investigate the eligibility of employees' and retirees' dependents.

The proposed $55,000 contract with HMS Employer Solutions of Texas would allow the company "to conduct an eligibility audit of all employee and retiree dependents enrolled in the City's healthcare program."

City Council Human Resources Chair Bill Peduto said it's a way for the city to potentially reduce health care costs.

"Just like a family or any business, we're seeing health care costs rise," Peduto said. "What this bill does is provide an opportunity to have an independent analysis done of costs associated with both our present workforce and our retired workforce in order to be able to realize savings for taxpayers."

The city is liable for its current employees' health care and also the post-retirement health care costs of any police or fire personnel hired prior to the start of state financial oversight in 2004. When Act 47 oversight began in Pittsburgh, police and fire contracts no longer included retiree health care.

"But there are a lot of police and fire personnel who came on board before 2004 that will still receive (health care) when they retire," Peduto said. "The liability is not going to go down for a significant amount of years. It will, though, in the future."

Currently, Pittsburgh's health care liability, pension obligations and general debt all add up to about $1 billion in unfunded liability, according to Peduto, which would be one of the highest municipal debt-to-budget ratios in the country.

The bill to initiate a contract with HMS Employer Solutions is up for a preliminary council vote on April 10.