Quincy Leaving the GIC

Enrolling in Blue Cross

After nine years, the City of Quincy has notified the Group Insurance Commission (GIC) that it will be leaving the state health insurance program in 2018. Beginning next July 1, Quincy retirees, survivors and employees will be enrolled in plans being offered by Blue Cross Blue Shield.

By way of background, Quincy is what we call a “Coalition Bargaining” community that has adopted and implemented Section 19 of the Municipal Insurance Law (Chapter 32B). Under Coalition Bargaining, local officials negotiate with a Public Employee Committee or PEC to craft a comprehensive agreement detailing the health insurance program for their retirees and employees.

Among the PEC members are representatives of all local unions as well as a retiree designee. By law, Mass Retirees appoints the retiree designee to the PEC.

At this time, 196 PEC retiree designees have been appointed across the Commonwealth. And for Quincy, Association member Pauline Kennedy, a Quincy Medical Center retiree, serves on that city’s PEC.

“Before this December 1 (as mandated by state law), Quincy had to decide whether it would continue with the GIC or not,” reports Kennedy. “Some time ago we recognized the impact our decision would have on our fellow retirees and employees and therefore began to explore our options very early on.”

GIC Uncertainty

It should be noted that uncertainty over the GIC’s future direction weighed heavily on the Quincy PEC. As we’ve been reporting in the Voice, GIC’s decisions on insurance plans and premium rates would not be made until after the December 1 deadline.

Also, there was concern over the prospect of increases in copays, deductibles and other out-of-pocket expenses, having been hit with two increases in the past two years. With so much uncertainty with the GIC, the PEC exercised its due diligence to see what other municipal health insurers would be interested in providing coverage to Quincy retirees and employees.

Two major municipal insurers stepped forward – Harvard Pilgrim and Blue Cross. It should be noted that Harvard Pilgrim was Quincy’s insurer before it went to the GIC.

“We requested four plans for retirees from the insurers that bid on the insurance contract – a PPO and HMO plan for non-Medicare retirees and an Indemnity and HMO for Medicare retirees,” reports Kennedy. “We also conducted an extensive vetting process, including lengthy interviews, with the bidders.”

But this time around, Harvard Pilgrim couldn’t compare with its competition, and Blue Cross won out. Before a decision was made to accept Blue Cross’ bid, meetings were held with the city’s retirees to engage them in the decision-making process and gauge their preference for a health insurer.

“With the decision made to go with Blue Cross, we must now prepare for the transition out of the GIC,” according to Kennedy. “That includes scheduling informational meetings separately with our Medicare and non-Medicare retirees.”

“We commend this type of planning,” comments Association PEC Coordinator Patricia Igo. “Over the years, one of the big problems, that we’ve seen  when communities change their health insurance, is the retirees and survivors not being informed in advance, causing unneeded confusion and anxiety among the group.

Staying with Coalition Bargaining

When it decided to leave the GIC and go with Blue Cross, Quincy did not abandon Coalition Bargaining. Instead, the PEC and city officials stayed with it and entered into a new Section 19 Agreement.

“As our members know, Mass Retirees has always been a strong proponent of Section 19 or Coalition Bargaining,” according to Igo. “We believe that it remains the best approach toward establishing a comprehensive health insurance program for local retirees and survivors.”

That comprehensive approach includes a key feature – locking in the retiree/survivor premium percentage for a number of years. No question, this feature provides a retiree with a level of security that their premium percentage will not spike up unexpectedly and by a substantial amount in the near future.

“Our new Section 19 Agreement embodies that important protection and more,” continues Kennedy. “Quincy retirees and survivors will know what their premium percentage will be for the term of our agreement with the city, which is six years - from 2018 to 2024.

For the first three years (2018-2021) the Medicare and non-Medicare retiree percentage for the HMO plans will be 15%, then 17.5% for the next two years (2022-2023) and then 20% in the last year (2024). During the term of the PEC’s Agreement, the retiree premium percentage for the PPO plan will start at 18% and increase incrementally to 25% during the Agreement’s final two years.

Medicare retirees are secure that their premium percentage will remain the same at 25% for the Indemnity plan throughout the Agreement’s six years. Just as important, they are guaranteed a 55% Part B refund while the Agreement is in effect.

“That’s a great deal for the Medicare retirees,” comments Igo. “Most retirees don’t have a Part B refund and with an increased Part B premium this January (p.7), it means that much more to these retirees.

Quincy’s Medicare retirees will receive the 55% refund on or before September 30 of each year. In addition, the city will pay 50% of the dental insurance premium for its retirees.

“Particularly when one considers the general uncertainty out there in the healthcare market, this looks likes a very solid deal for Quincy retirees and survivors,” continues Igo. “Good job to you, Pauline,  and your fellow PEC members.”