Includes Part B Refund

Arlington has become the first municipality to join the state Group Insurance Commission (GIC) under the new municipal health insurance law (Section 23). Town officials have contacted the GIC before October 1, so that the transfer will be done on January 1, 2012.

As we reported in the last (September) Voice, Arlington was among the communities that initiated the process to transfer into the state program as soon as the new law was signed. According to the Association’s PEC Coordinator Tricia Igo, “Arlington informed us right away that they would be adopting the new law and preparing a proposal to join the GIC under Section 23.

“We immediately notified Dick LaValle, our retiree designee on Arlington’s PEC (Public Employee Committee).” Along with his alternate, Ken Hughes, Dick began meeting with the union representatives on the PEC to review the town’s proposal and then negotiating with town officials.

“With so much at stake, our negotiations with Town Manager Brian Sullivan were intense,” reports LaValle. “My focus was always on protecting my fellow retirees and survivors.”

It was estimated that Arlington would save some $4 million in the first year that it belonged to the GIC. Under Section 23, that meant $1 million could be deposited into a mitigation fund to benefit retirees, survivors and employees.

“In our contract with the town, which runs for 3 ½ years, we agreed to two major ways that the mitigation fund could be used,” continues LaValle. “One would help our Medicare enrollees, while the other benefits non-Medicare retirees.”

For Medicare retirees, who currently total 806, the fund will refund them $25 per month as a subsidy toward their Medicare Part B premium. This refund would be paid for two years.

Non-Medicare retirees would be eligible for the Health Reimbursement Account (HRA) that is established with the balance of the first year savings and administered by the town at its own expense. Under the Arlington HRA, a non-Medicare retiree could be reimbursed for their copayments relating to outpatient surgery, inpatient/outpatient, emergency room and high tech imaging.

In addition, other out-of-pocket costs, for covered services from in network providers, would be reimbursed once they exceed $1,250 for an individual and $2,500 for a family. This includes prescription drug copayments, deductibles and office visit copayments.

“One added feature with the HRA is that once it’s depleted of funds, the town will replenish it each year at $200,000,” comment LaValle. “Since at least for now, the Part B refund ends for Medicare retirees after 2 years, I’m hoping that we could revisit their being eligible for the HRA after that.”

While Section 23 does not require that the PEC and municipality include premium contribution ratios as part of any agreement, Arlington’s contract does address the issue. For the 3 ½ years that the agreement covers, the contribution ratio for retirees, currently set at 85%/15%, will remain so.