Health plan shifts costs to Martha's Vineyard public employees
File photo by Susan Safford
Significant changes proposed for a health plan for Martha's Vineyard public sector employees, effective July 1, are expected to save Island towns, school districts, and Dukes County hundreds of thousands of dollars. While the new plan is designed to reduce the overall cost for health insurance premiums, it shifts more of the expenses to employees through increased deductibles and co-pays.
All Island towns, the Martha's Vineyard Regional High School and Up-Island Regional School districts, Martha's Vineyard Commission, and Dukes County buy health insurance through the Cape Cod Municipal Health Group (CCMHG). The health group is a coalition of 52 towns and other government units that form a purchasing unit with more leverage to negotiate with health care providers than a single town possesses.
State lawmakers enacted a health care reform package last July that is expected to lower the cost of health care premiums for many Massachusetts towns. It will also allow towns to require plans with co-pays and deductibles, like those most common for other government workers and with the private sector.
The new law also allows municipal employee unions to participate in an expedited collective bargaining process. If the town and its unions cannot agree on the transition to new medical plans after 30 days, including mitigation, an arbitration panel would decide the terms in which the town could change to the new plans.
A mitigation plan must be included that returns up to 25 percent of the savings in year one to employees. Those funds are intended to help employees who might be initially hit hard financially by the higher deductibles and co-pays.
Since health benefits make up a large portion of town and school district budgets, reductions in the cost of employee health benefits could add up to substantial savings.
Tisbury, for example, should save about $280,000 in fiscal year 2013, treasurer and tax collector Tim McLean said in a phone conversation Monday. He expects a reduction of almost 10 percent in the town's employee health insurance premiums under the CCMGH's new plan.
Superintendent of schools James Weiss serves as one of Martha's Vineyard's CCMHG representatives, along with Dukes County Treasurer Noreen Mavro Flanders. Mr. Weiss said there are about 525 educational employees Island-wide who would be affected by the CCMHG health plan changes.
Since Edgartown, Oak Bluffs, and Tisbury school personnel are town employees, their health care cost savings would be reflected in town budgets. Mr. Weiss said he expects big savings for the Island's two regional school districts, Martha's Vineyard Regional High School and Up-Island Regional School districts.
"I estimate that for the high school, the overall savings is going to be $358,000," Mr. Weiss said. "Twenty-five percent of that, or about $90,000, we have to share with the 155 employees. Up-Island, the savings is $168,000. The 25 percent for mitigation is $42,000, for 72 employees."
Mr. Weiss said the CCMHG member towns and government bodies voted in October 2011 to change medical plan offerings to more closely reflect the state General Insurance Commission (GIC) plan, which was the benchmark plan for the health reform legislation.
Under the new law, towns can opt for plans outside the GIC, if they can demonstrate that they will be reasonably similar in costs. Mr. Weiss said CCMHG created "look-alike GIC plans" that will replace its present plans after June 30.
"What we're trying to do in the schools, and I can only talk about the two regional districts because down-Island school employees are town employees, is to go to the new plans created by the Cape Cod Municipal Health Group," Mr. Weiss said. "The process to do that is very involved and very complicated. We have begun that process."
Mitigation plan negotiations
In regard to a mitigation plan, Mr. Weiss said he has proposed that employees on the CCMGH plan in the Island's two regional school districts have a "benefit premium holiday."
"I'll just pick a month, say January of next year, that they won't pay any premiums," he explained. "That will give them back money, the 25 percent. And then we're putting aside a pool of dollars for people who have high costs. Now that's what we're proposing; nobody has accepted it yet."
Mr. Weiss said the regional school districts' bargaining units would have 30 days under expedited bargaining to agree to that proposal.
"And if they don't accept it, then it goes to arbitration," he added. "We have been working with our attorneys to fashion the process to make sure we stay within the law. Because we've got to get this all done by May 1 so we can notify everybody and get new plans in place by July 1."
Information sessions next week
The CCMHG will host five sessions on February 22 and 23 with Blue Cross Blue Shield and Harvard Pilgrim Health Care representatives available to provide information about the upcoming health plan changes.
Sessions on February 22 include two at the Martha's Vineyard Regional High School's Performing Arts Center at 2:15 and 3:30 pm, and one at the Katharine Cornell Theatre on Spring Street in Vineyard Haven at 6:30 pm.
Sessions on February 23 are at 10 am in the West Tisbury Town Hall Conference Room and at noon in Edgartown Town Hall.
Mr. Weiss said he hoped many of the Island's educational and public sector employees would attend.
"It's important that they understand what the potential plan looks like, that they hear what deductibles mean, what co-pays mean, what family out-of-pocket maximums mean," Mr. Weiss said. "There are a whole bunch of insurance terms, and people don't necessarily know them."