Tuesday, July 12, 2011

Chamber-Supported Municipal Health Insurance Reform Included in FY’12 Budget

On Monday, the Legislature voted to accept the Governor's amendments to the municipal health reform plan that was included in the Legislature’s budget. This measure will result in significant savings to cities and towns while preserving local services, protecting municipal jobs and maintaining municipal health benefits at least equal to state employee health benefits. As a member of the Mass Reform First coalition, the Chamber has worked with other business and civic groups for municipal health insurance reform.

Thanks to the efforts of the Governor, Speaker DeLeo, Senate President Murray, Ways and Means Chairmen Brewer and Dempsey and members of the Budget Conference Committee, this bill achieves fair and meaningful reform, providing the following framework for municipalities to make cost-saving changes to their health plans:
  • Local officials are given authority to design a health plan that results in savings or transfer employees into the Group Insurance Commission (GIC) if the savings in GIC would be 5 percent greater than those possible through local plan design changes. All proposed changes need to be presented to a public employee committee (PEC) representing unions and retirees.
  • If the PEC does not agree to the proposed changes within 30 days, a three-member panel will be established. This panel will be comprised of a municipal and labor representative and an impartial mediator.
  • The panel is given 10 days to review the proposed changes. Changes that ask too much from workers may be rejected -- however, the panel must approve the proposed changes for immediate implementation as long as the cost sharing plan design features are no greater in dollar amount than the most-subscribed plan in the GIC.
  • Up to 25 percent of the total savings from lower premiums achieved through plan design changes may be returned to employees to offset higher co-payments and deductible. Additionally, the plan calls for a moratorium on changes to retiree premium cost-sharing agreements for three years.
The Chamber welcomes the compromise and commends the Legislature and the Administration for making the difficult decisions necessary to move forward on this critical issue. Giving local governments greater authority over the design of public employee health care plans – similar to state government – will help slow the growth of health care costs and relieve pressure on local budgets.

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