Independence sorts out retiree benefits mistake, drops outside firm

Mike Genet
The Examiner USA TODAY NETWORK

In July, the city of Independence started a contract with NueSynergy to handle retiree benefits and billings. The company would handle what can be an arduous in-house task.  

But after an erroneous message went out to retirees several weeks ago, – that their benefits would be canceled – the city will sever ties with the company and take that task back in house. 

Retirees had pushed for the city to do so as soon as possible, even with open enrollment for benefits ongoing. The City Council approved the change Monday. 

In addition to about 900 to 1,000 employees on the city's insurance plan, City Manager Zach Walker estimates 1,700 retirees are on the insurance plan, and communicating with them adds another layer. 

“So, not only volume, but they're scattered across the country,” he said. “It was a time-intensive task to do all the benefits, so the idea was to use economy of scale.” 

NueSynergy, based in Leawood, outsources its communications, Walker told The Examiner, which by itself is not an issue. But the third-party vendor accidentally grabbed a wrong contact list and sent to Independence retirees an insurance cancelation message intended for an entirely different group. 

In reality, the city stresses, no such cancelation was happening or will happen.  

Walker said he started receiving calls at least a month ago. While perhaps a one-time error easily avoided in the future, Walker said it was still unacceptable and continuing with NueSynergy wasn’t possible. 

“From that time, anything that happened was being viewed with suspicion or mistrust,” he said, and to his knowledge NueSynergy hadn't sent any explanation to retirees. The city planned to send out such a message this week. 

The contract with NueSynergy allowed for the city to terminate at any time. Walker said the city will use that company's third-party software for data entry with benefits open enrollment – which was extended to next week. Once open enrollment is done, the city will migrate that data into its updated software for current employee benefits. 

Former firefighter Henry Carner told the council earlier this month the retirees have “no faith or trust” in NueSynergy to handle their personal information and hoped the contract could end immediately.  

“We want that contract done,” he said during the Nov. 1 council meeting. “Get our accounts back under the city house forthwith. Get us back under our cybersecurity and out from under theirs.” 

Marla Kimsey told the council that retirees don't necessarily object to the original change, as a means to update practices, but what happened with NueSynergy amounted to “emotional abuse of both retired and current employees,” she said, and retirees never received an explanation from NueSynergy. For retirees, it was shock and uncertainty, and for some current employees it meant many stressful hours fielding calls. 

The contract with NueSynergy was for about $25,000, Walker said, whereas having an employee dedicated solely to retiree benefits would be an estimated $85,000 position. A future decision is fluid, he said, but the value of having an in-house employee and presumably avoiding major foul-ups like what happened is likely worth the added expense.  

“I guarantee we've spent more than that in man-hours to figure this out,” he said. 

“We've guzzled quite a bit of coffee over this,” Walker said to the council about resolving the benefits issue with the retirees, “and I think we understand each other now.”