Small town stipend can mean big health benefit
As municipal officials begin to grapple with department budgets in anticipation of the new fiscal year that begins on July 1, rising healthcare costs pose a continuing challenge.
Industry professionals have advised budget writers to plan on an increase of approximately seven percent. If there is any good news, it is that the increase is less than in recent years.
In some cases, towns have begun to modify health insurance benefits for employees and phase out benefits for elected officials.
The six Island towns pay 75 percent of the insurance premiums for those who receive health insurance benefits. By contrast Dukes County pays 90 percent of the cost of health insurance for county employees, though county commissioners are currently exploring whether to reduce the county's share of insurance premiums to fall in line with town policies.
According to figures supplied by town financial administrators, the annual cost of a town's portion of the health insurance premium range from approximately $9,000 to $15,000 per person insured.
The actual cost can vary widely, depending on the health plan selected, and whether it covers an individual or a family. The average cost to the town can also vary, depending on such factors as the number of people who join or leave a plan during the year, and whether the town actually spends more or less than it projected in its budget.
State law makes municipal employees who work 20 or more hours a week eligible for health benefits. The law also makes elected officials who receive compensation, even in the form of a small stipend, eligible for health insurance. Eligibility includes family benefits.
The average cost to taxpayers for each elected official enrolled in town health plans differs in each town. Three towns have moved in recent years to eliminate health benefits for elected officials.
At annual town meeting in April, Oak Bluffs voted not to continue to provide health insurance benefits for any newly elected officials. The town's finance and advisory board unanimously recommended the change. "The committee feels that receiving health benefits should not be a consideration when running for office. The committee also feels there is a real cost saving to the town in the future," the board members wrote in the town meeting warrant.
Two elected officials, a member of the cemetery commission and the town's tree warden, are currently enrolled in town healthcare plans, according to town finance officials. Their health benefits will end when their current terms expire, said town administrator Michael Dutton.
In the current fiscal year, Oak Bluffs budgeted $1,890,000 to pay its share of the health insurance premium for all town employees. With 203 people enrolled in the various plans, the average actual cost to taxpayers annually is $9,904 per person.
A measure of the budget-busting nature of healthcare costs in Oak Bluffs reveals itself in the town's recent efforts to reduce costs. Town employees were offered financial incentives to switch from high-cost plans to less expensive plans with similar benefits. The town realized a net savings.
"We've managed to reduce the cost, we've eliminated the more expensive health plans as an option," said Mr. Dutton. "We did that through negotiation. That was a successful thing for the employees and the towns."
In Tisbury, voters eliminated the healthcare benefit option for paid elected officials a decade ago. Those who were enrolled at that time were "grandfathered," or allowed to continue receiving benefits as long as they continue to serve. According to finance officials, five elected officials are currently enrolled in town health plans, under the grandfathering exception. These include two department of public works commissioners and one member each from the board of selectmen, the board of health, and the water commission.
Tisbury budgeted $2,465,000 for its share of employee health insurance premiums this year. With 219 people currently enrolled in the plans, the average cost to the town is $11,255 annually, for each person insured.
In 1987, West Tisbury voters decided that elected officials would no longer be eligible for health insurance benefits. No elected town officials are currently enrolled in town sponsored health plans.
Three towns, Aquinnah, Chilmark, and Edgartown still extend health benefits to elected officials who receive stipends, under the provisions of the state law.
In Chilmark, one of the state's wealthiest towns, all nine elected officials who are eligible by virtue of their stipends are enrolled in town health plans. This includes the three-member boards of selectmen, assessors, and health.
Chilmark budgeted $484,505 for its share of town employee insurance costs this year. With 32 people enrolled in various plans, including elected officials, the average cost to the town is $15,141.
Marshall Carroll, chairman of the town's finance advisory committee, says there has been no controversy over the practice. "It hasn't been an issue," he said.
Edgartown provides stipends to members of the board of selectmen and the board of assessors. Three members of those boards are enrolled in town health plans.
This year, Edgartown budgeted $2,341,562 for its share of healthcare costs for the 210 people insured through the town. That makes the average cost per person $11,150.
Larry Mercier, the town's retired highway superintendent and a veteran of many elected positions in Edgartown, currently sits on the finance and advisory committee, the board that serves as the town's fiscal watchdog. He also serves on the board of assessors, but receives town health benefits as a retiree, not through the board of assessors.
"I don't believe it's an issue," said Mr. Mercier. "I've never heard anybody complain about it. It's a way of finding people to serve the town."
In Aquinnah, selectmen are the only elected officials who receive compensation in the form of a stipend, and are therefore eligible for health benefits under state law. One selectman is enrolled in a town sponsored health plan.
According to the town accountant, Aquinnah budgeted $192,747 for its share of healthcare premium costs this year. With 15 people currently enrolled in town health plans, the average cost to the town is $12,850 per person enrolled.