Gardner 1st To Implement New Insurance Law

Agreement Includes Premium Holiday

JANUARY 2012 VOICE: In our November Voice, we highlighted several of the communities that had adopted the new Municipal Health Insurance (MHI) law in order to join the state Group Insurance Commission (GIC). But, let’s not forget there is another major component to MHI, namely the option to make plan design changes (Section 22 of Chapter 32B). Gardner became the first municipality to implement the plan design option.

Remember, under Section 22, municipal officials can make changes to the dollar amounts for copayments, deductibles and tiers in the local insurance plans without retiree and employee approval.

The one condition is that they can act unilaterally as long as they don’t exceed the dollar amounts set forth in the GIC’s highest enrolled Medicare (Optional Medicare Extension or OME) and non-Medicare (Tufts Navigator) plans.

“That’s what they did here by making changes to our plans that didn’t exceed the GIC thresholds,” according to Fran Cyr, who is retired from the city’s fire department and serves as our retiree designee on the PEC (Public Employee Committee).
“For example, we have no deductible under our Medex plan, but beginning January 1, there will be a new calendar year deductible of $35, which is what the GIC has in its OME plan.

“Because of the new state law, we can’t stop them from doing this. We could only attempt to moderate the dollar increases as best we could.”

Under the MHI Agreement with the PEC, city officials will allocate slightly more than $176,000 in premium savings, as mitigation funds for retirees and employees. These mitigation funds will be used to implement a one-month (February 2012) premium holiday for all subscribers.

“I had hoped that we would use the mitigation funds for a health reimbursement account (HRA) rather than a premium holiday,” continues Cyr. “But, it was too expensive to administer the account (almost $48,000), so the PEC decided to return more money to everyone with one free month of insurance.”

According to the Association’s Shawn Duhamel, “Gardner is not only the first to implement plan design changes (under the MIH law), but also the first to adopt the premium holiday for the mitigation funds. This is attractive to some, particularly local officials, since it’s much easier to administer than Medicare Part B reimbursements or HRAs.

“But, we believe that the premium holiday doesn’t properly satisfy the purposes for which the mitigation funds should be used, namely to help those who are struggling with extraordinary out-of-pocket expenses when it comes to their healthcare. For that reason, we’ve advised our PEC designees to make every effort to keep their PEC’s focus on a Part B refund and/or an HRA.”