Strong Push For Coalition Bargaining On Local Health Insurance

MAY 2005
- Dracut: Latest to Adopt Law - In several communities, a serious push is underway by retirees and
employees for the adoption of the local option law (Section 19 of
Chapter 32B), which allows for coalition bargaining on their health
insurance. Some of these efforts are producing positive results.

“I'm
pleased to report that coalition bargaining has been adopted in Dracut
with our selectmen voting unanimously for it,” states Andy Powell, a
fire captain and chairman of the town's insurance advisory committee.
“There are many individuals and groups that helped achieve this
landmark, and I'll take this opportunity to thank the Association for
its support of our efforts here.”

Recently,
Melrose officials joined with union representatives in support of
Section 19. Final adoption of coalition bargaining for Melrose is
contingent upon enactment of a home rule petition that would allow the
city to contribute slightly more to the HMO premiums of their retirees
than employees.

Editor's Note: Melrose's
home rule petition is unique in that it is not mandated by Section 19.
Since the coalition bargaining law requires that the city's
contribution to the HMO premium be the same for all enrollees
(retirees, employees and survivors), the home rule petition, allowing
for different rates, became necessary.

In
Tewksbury, its Board of Selectmen voted to adopt Section 19. As we went
to press, the town's unions will be voting to complete the process and
implement coalition bargaining there.

“There's
growing interest in coalition bargaining from local retiree
organizations, for example the Quincy Retiree Association,” according
to our Insurance Coordinator Cheryl Stillman. “What we're seeing in
Dracut, Melrose and Tewksbury is representative of developments
throughout the Commonwealth.”

Upon
adopting the coalition bargaining law, municipal officials are
negotiating on health insurance plans, with one bargaining committee,
which includes a retiree, designated by our Association, and
representatives from each of the local unions. “It's an innovative
approach since retirees are sitting at the same negotiation table with
the unions and city officials, hammering out their insurance plans,”
continued Stillman.

GASB May Intensify Interest

Interest
in coalition bargaining law may further intensify as we draw closer to
a deadline, which will have far-reaching impact on state and local
insurance plans for retirees and survivors. That deadline is the
eventual implementation of the GASB (Government Accounting Standards
Board) standards for pre-funding public retiree healthcare costs.

State
and local officials generally adhere to the accounting standards,
established by GASB, including what information they must include in
their financial reports. Currently GASB requires them to report the
cost of healthcare benefits for a particular year.

Last year (see September 2004 Voice),
GASB finalized standards, entitled OPEB (Other Post Employment
Benefits), requiring state and local officials to report the long-term
cost of employee/retiree healthcare benefits and how they intend to pay
it. While the OPEB standards will be implemented, on a staggered basis,
starting July 1, 2007, they are already having an impact, as reported in a related article.

According
to John Brouder of Boston Benefit Partners, “In our consulting work
with local teacher and employee unions, we've observed a growing
recognition by retirees and employees of GASB's potential impact. Our
clients have also recognized that coalition bargaining may offer the
best safeguards when it (GASB) is eventually implemented.”

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