Chilmark offers incentives for health plan switch

By Susan Vaughn - May 17, 2007

With no hesitation, the Chilmark selectmen Tuesday night approved a proposed incentive payment to town employees, elected officials, and retirees of between $500 and $1,000, to switch from an expensive indemnity health insurance plan to any other insurance plan.

The change could save the town nearly $500 in the first year for each individual plan and $1,607 for a family plan, town treasurer Melanie Becker told the selectmen. The future annual savings would be nearly $1,000 for an individual plan and $2,607 for a family plan, she said.

The projected savings is the minimum based on the Blue Cross Blue Shield preferred provider plan, the next most expensive plan to the Master Health/Master Medical indemnity plan. The savings would be even greater if a person chose a health maintenance organization or another PPO plan, Ms. Becker said.

The total annual savings to the town would be $30,308 if all 23 people on the indemnity plan switched to another plan, according to a chart Ms. Becker prepared. In the second year and in the future annual savings would be $50,308.

"It's unlikely that everyone would switch," Ms. Becker said, but added that offering the incentive payment in a lump sum in July might be an additional incentive to employees.

Ms. Becker said Wednesday that the town is not trying to push anyone off the indemnity plans who feels they work best for them, but the incentive payment would get people to take a hard look at the different plans. "It's a big benefit to the employees," she said. "It's a win-win situation."

The savings to Chilmark employees who switch would be $869 for a family plan premium and $363 on an individual plan premium on top of the incentive, she said. Ms. Becker said the employees could switch to a preferred provider, health maintenance organization, or any other plan to get the incentive payment. The town pays 75 percent of its employees' health insurance.

Chilmark is the first Island town to offer an incentive payment to employees to switch insurance plans. The idea came from the new three-year contract for all Island public schoolteachers, Ms. Becker said. The contract offers teachers who switch out of the indemnity plans in the first or second year of the contract $500 for individuals, $750 for parent/child and $1,000 for a family, and smaller amounts in the third year.

Ms. Becker said the payments could be funded from the employee benefit health insurance line in the 2008 fiscal budget. The town's cost of employee health insurance has nearly doubled, from $224,757 in fiscal year 2002 to $440,459 in the upcoming fiscal year.

The selectmen unanimously agreed that there was no reason not to approve the proposal. They approved offering the incentives to all three groups to be paid in July.

The selectmen's approval was crucial Tuesday because employees have only two weeks to change plans since May is the open enrollment period for health insurance.

The Chilmark action follows a push by the Cape Cod Municipal Health Group, which buys health plans for all municipal employees on the Island, but Ms. Becker said the push to get employees off the indemnity plans has been going on for years. The health group sponsored a health fair on May 4 where representatives from several insurance plans were on hand to explain their programs to the health-care recipients.

More than 75 percent of Vineyard public employees and officials have the outdated and expensive indemnity plans instead of the newer managed care plans. Those plans offer other benefits, such as reimbursement for fitness clubs or weight loss programs.

Judith Jardin, the Vineyard's wellness coordinator for the municipal health group, said, "Our hope is that employees will come to understand that the most expensive health plan offered does not necessarily offer the best benefits." The health group has projected a 10 percent increase in health insurance costs on the Vineyard in the coming fiscal year.

In other business Tuesday, the selectmen heard arguments from the superintendent of schools and members of the regional school committee to convince them to have a special town meeting to accept the state's assessment formula for Martha's Vineyard Regional High School.

Four of the six Island towns need to approve the statutory assessment. Aquinnah voted last week to stay with the regional agreement, which apportions costs on a per pupil basis rather than go with the state's formula. Edgartown also voted not to call a special town meeting to vote on the matter. The West Tisbury finance committee recommended that its town accept the statutory assessment for this year. West Tisbury has scheduled a special town meeting on the issue for June 5.

In stressing the urgency on the matter, School superintendent James Weiss said he is facing a June 1 deadline to offer teacher contracts. If the school system doesn't have a budget by then, he said he doesn't know if he can offer the contracts. He has sought a legal opinion on that issue.

School committee member Jeffrey "Skipper" Manter added, "The high school needs to have a budget.... We can't operate; we can't do contracts. I see this affecting the quality of education." He asked the selectmen to call a special town meeting to ratify the budget.

Susan Parker, chairman of the school committee, said the towns' approval of the new formula would be a "stopgap measure this year" and could be reconsidered on a year-by-year basis, according to state officials.

Selectman Riggs Parker did not agree with her, saying he does not believe the state would allow the Island schools to change once the statutory formula is adopted.

"They've (the state Department of Education) created a monster here," Mr. Parker said. "I don't see any risk to the high school." He said the Island towns should put pressure on the state to stop "the movement against regionalization."

Selectman chairman Warren Doty said the board's resistance to going along with the state formula was not based on the extra $75,000 cost to the town, but was a "question of philosophy and regionalization." He said the additional cost would not put the town budget in an override situation.

The selectmen said they will seek a legal opinion and wait to hear from Mr. Weiss on the school system's legal opinion. The latest the Chilmark selectmen could decide on having a special town meeting is June 5, their next scheduled meeting. "It's a very important issue," Mr. Doty said. "We would be glad to meet sooner."

The selectmen also interviewed and selected five candidates for the new shellfish advisory committee that will promote restoration of the shellfish industry. Three members have a commercial interest in shellfishing: John Larsen, John Armstrong and Emmett Carroll. Mr. Larsen and Mr. Armstrong also were members of the shellfish restoration committee, and Mr. Carroll has worked on an aquaculture grant.

Heather Sussman said she is interested in the health of the town's ponds and learning more about shellfishing. Elizabeth Lewenberg is a retired biology teacher and vice president of the Chilmark Pond Association. She said she would bring science and inquiry to the committee. All were unanimously approved.

The committee's first task will be to help hire a shellfish propagation agent. The new position is currently being advertised and applications accepted with a goal of hiring in June.