Peabody & Orange Eye January Entry

JUNE 20, 2012: A newly enacted change to insurance law has opened the door for mid-year entry into the state’s Group Insurance Commission (GIC). Unless otherwise provided by special act, enrollment in the GIC has traditionally begun on July 1.

Under Chapter 118, the FY13 Supplemental Budget signed into law by Governor Patrick on June 19, 2012, municipalities may now also enter the GIC on January 1, if they notify the agency of their intention to do so by July 1 of the previous year.

The decision of a municipality to join the GIC is a local option that can be achieved through coalition bargaining under Section 19 or by enacting Section 23 (Municipal Insurance Reform Law, Chapter 69, Acts 2011). Under coalition bargaining an agreement is reached between the municipality and Public Employee Committee, which contains retiree and labor representatives, to join the GIC.

Under the new Section 23, a municipality may force entry into the GIC, if it can demonstrate savings of at least 5% beyond the real or projected cost of its local insurance plans after local plan design changes take place. And, unlike special acts that have previously allowed mid-year or staggered entrance into the GIC, Chapter 118 marks a permanent change in the law.

Retiree, labor and local officials in the City of Peabody and the Town of Orange are finalizing their negotiations at this time. Indications are that both communities will opt to join the GIC for a January 1, 2013 entrance date.

Also contained within Chapter 118 is an appropriation of $150,000 to fund actuarial services needed by the Special Commission on Retiree Healthcare. Legislative Liaison Shawn Duhamel represents the Association on the 11-member Commission, which is set to issue a report on potential further healthcare reforms by November 30th.