FOCUS NOW SHIFTS LOCALLY

SEPTEMBER 2011 VOICE: No sooner had Chapter 69 become law, than Arlington’s board of selectmen voted 4-0 to move forward and join the state Group Insurance Commission (GIC). Right behind them, Somerville Mayor Joseph Curatone also began the move to the GIC.

Other communities, from cities, such as Fall River and New Bedford, to the smallest Berkshire towns are now weighing how to proceed. Essentially, Chapter 32B (municipal health insurance) now provides multiple options as to how to negotiate and design local insurance benefits.

Municipalities can continue to:
• Utilize traditional collective bargaining under Chapter 150E.
• Adopt Coalition Bargaining under Section 19.
• Initiate Expedited Bargaining under Section 21, which then allows for local plan design through Section 22 or transferring to the GIC under Section 23.

If a community opts into Section 21 (Expedited Bargaining), it must then adopt certain protections for retirees and survivors. First, retiree/survivor contribution rates in place as of July 1, 2011 cannot be increased for three years. Next, up to 25% of the total savings generated through plan design changes will be set aside for the exclusive benefit of retirees, survivors and employees to offset higher out-of-pocket costs.

A local Public Employee Committee, to which our Association has the exclusive legal responsibility to name a local retiree representative, will negotiate with the municipality over how to best utilize the mitigation funds. The law allows for reimbursement of Medicare Part B, the creation of Health Reimbursement Accounts (HRAs) and other steps to offset costs to retirees and employees.

“Each community has the legal right to opt into this new law. If they do, then we will appoint a local retiree on that PEC, who will have an automatic 10% weighted vote,” explains Association General Counsel Bill Rehrey. “As a rule, we try to appoint members who have some background in negotiations and knowledge of how health insurance plans are designed. Living within the community from which you retired is another plus.”

Once local negotiations under the new law begin, an agreement must be reached within 30 days. If no agreement is reached, then the municipality is allowed to make unilateral changes in copayments and deductibles up to the level set by the state GIC. A state appointed review panel would then review the case, confirm whether or not the savings estimates are accurate and establish the mitigation process with up to 25% of the first year’s savings set aside.

City and town leaders can also unilaterally join the GIC, if they can first prove that doing so will save the community at least 5% beyond what savings can be achieved through local plan design changes.

“We hope that a fair process has been set up, where both sides can negotiate in good faith and avoid having to go before the review panel. It’s in everyone’s best interest to reach an agreement on their own,” said Duhamel. “There are a few communities, such as Arlington, that feel they will be better off under the GIC. After reviewing the numbers and examining the facts, maybe the PEC will agree. The important thing is that a process now exists where these decisions can be quickly and fairly made.”