11,000 New Municipal Enrollees

MAY 2012 VOICE: Lowell is not the only municipality whose retirees and employees will be enrolled in the state’s Group Insurance Commission (GIC) beginning July 1 (see March Voice). Seven other communities have also notified the GIC that they will be transferring their retirees and employees this July.

According to the Association’s PEC (Public Employee Committee) Coordinator Tricia Igo, “Our retiree designees for the Bedford, Holden, Lexington, Marblehead, Monson, Salem and Sudbury PECs reported to us that their committees reached agreement with local officials to join the GIC. They all notified the state by the March 1 deadline, as required under the new Municipal Health Insurance (MHI) law.”

These seven new GIC communities, plus Lowell, will be adding another 11,000 local retirees and employees to the state insurance program. This brings the total number of municipal enrollees to some 56,680.

 If one includes the approximately 7,400 retired teachers and survivors who will continue to be enrolled in the GIC’s RMT (Retired Municipal Teachers) Program, the total number of local retirees, survivors and employees, insured by the GIC, will  exceed 64,000. As of July 1, there will be 33 municipalities and several school districts in the GIC.

“At this time, most PECs and local officials are crafting agreements that make plan design changes (copayments, deductibles, tiers, etc) in their existing insurance program,” comments Igo. “Key features, contained in many of these agreements, are similar. But, the same doesn’t hold true when one compares the agreements reached among the newest entrants to the GIC. They each have their own distinctive features, with some including a Medicare Part B refund.”

Part B Refund/Subsidy For Bedford and Lexington

“We succeeded in having language included in the MHI law that a Medicare Part B refund should be considered as part of any agreement between the PEC and local officials,” states Association Legislative Liaison Shawn Duhamel. “Both Bedford and Lexington have done just that.”

“Our PEC began negotiating with Bedford officials at the end of last year, and there was a great deal of give and take during the 30 days of negotiations,” according to our retiree designee Paula Verrier. “I’m pleased that the three-year agreement to join the GIC, from July 1, 2012 to June 30, 2015,  takes special note of our Medicare retirees.”

Under the Bedford agreement, there will be a one-month premium holiday in July 2012 and in July 2013, a $100 premium reduction for Medicare supplement subscribers.
“More importantly, the agreement maintains the 50% Medicare Part B refund for retirees insured on July 1,” continues Verrier. “These retirees are assured of receiving the refund for the three years of the agreement.”

Non-Medicare retirees, along with employees, will be eligible for reimbursement from an HRA (Health Reimbursement Account) for expenses incurred due to co-pay and deductible increases upon entering the GIC. Eligible retirees will be issued a debit card and entitled to a maximum reimbursement, projected (until July 1, 2012  enrollment numbers are available) to be $690 for individuals for $1,640 for families during the HRA’s first year of operation.

“Despite claims to the contrary by my fellow retirees in Framingham, Lexington was the first community to adopt the coalition bargaining law (Section 19) back in 1993,” contends Carol Murphy, our retiree designee for that town’s PEC. “And, we’ve continued to implement our health insurance program under Section 19 over these many years.

“So, when it came to joining the GIC, we did it by negotiating, as we have been doing, under Section 19 and not the new law. As a result, I believe that we’ve reached a more comprehensive agreement, including the premium contribution splits for the three years that we’ll be enrolled in the GIC.

“And for our Medicare retirees, the town has agreed to pay them a subsidy during the contract’s three years. They will do this by reducing the annual premium of each Medicare supplement plan by 40% of the Medicare Part B premium.”

During the next three years (2012-2015), the Lexington PEC and town officials have agreed to establish an HRA, with a two-fold purpose, First, a debit card will be issued to non-Medicare retirees and employees who will be reimbursed a percentage of the calendar year deductible required by the GIC.

Second, the HRA will reimburse non-Medicare retirees and employees for their out-of-pocket costs (related to services covered by the insurance plan) that exceed $2,000 for an individual up to $5,000, and $4,000 for a family up to $10,000.

Sudbury Stands Out

“While we didn’t provide a direct Part B refund or subsidy in our final agreement to join the GIC, Sudbury included one feature that I believe is unique and makes us stand out from others,” claims Betsey Whitney, who serves as our retiree designee for that town’s PEC. “Here’s what it is.”

The town has agreed to transfer 35% of the first year savings from the transfer to the GIC. Members recall that the MHI law caps the percentage of savings , that retirees and employees could demand, at 25%.

“This larger percentage distinguishes us from most agreements which adopt the 25% cap,” continues Whitney. It has been estimated that Sudbury may save up to $1.5 million by joining the GIC, with the final number to be determined after open enrollment with the state.

These savings (35%) will be deposited in a mitigation fund, to be distributed as follows. All Medicare retirees will receive $400 each.

After that payment is made, the balance in the mitigation fund will be paid equally to each non-Medicare retiree and employee. In addition, retirees, as well as employees, who are insured by the town’s Blue Cross-Blue Shield and Fallon Community Health Plans that are part of the town’s existing Health Insurance Trust Fund, will be entitled to one premium holiday for the month of April, that will be paid from the Trust Fund, and not the mitigation fund.

“As always, we appreciate the hard work by these and all of our PEC designees,” concludes Igo. “It’s not an easy task, particularly since the MHI law has tilted the playing field in favor of local officials.”