MUNICIPAL HEALTH INSURANCE REFORM IN SPOTLIGHT

JULY 2011 VOICE: With pension reform in the spotlight for three years and still underway, municipal health insurance reform has temporarily pushed pensions to the back-burner as the House and Senate have tackled head-on the long-simmering municipal health insurance quandary.

Utilizing the FY12 State Budget as a fast-track legislative vehicle, the House first made a bold move in April when it pretty much scrapped collective bargaining as part of the local insurance contracts, leaving health insurance plan design in the hands of management - mayors, town managers, etc. This move by the House was a response to overwhelming opinion, generated by the media, local officials and taxpayer groups, that health insurance for local employees and retirees was far too luxurious and a budget-buster for cities and towns.

With the Senate preparing its budget in May, a strong Coalition of union and retiree leaders embarked on a compromise campaign within that branch, acting as a voice of reason in seeking an alternative plan that would allow labor (employees and retirees) at least a smattering of equality in the future of health insurance plan design.

Association President Ralph White asked Legislative Liaison Shawn Duhamel to be our Association's point man in integrating the position of retirees within the Coalition and the resultant meetings that took place with Senate leaders including President Therese Murray and Senator Katherine Clark, who the President assigned to moderate the health insurance initiative. Bill Rehrey, our legal counsel, became Duhamel's back-up in drafting amendments during the process.

After a non-stop week of day and night lobbying, Duhamel and the Coalition were able to convince the Senate to adopt a modified plan, which did result in some new rights for retired municipal employees and survivors.

The Senate's plan creates a local option provision by which municipalities can opt into an expedited 30-day bargaining process with the local Public Employee Committee, which contains a retiree representative. Unlike the House proposal, the Senate limits unilateral changes in plan design to just copayments and deductibles, which can only be raised to the levels set by the state GIC.

Both the House and Senate versions allow for the creation of health reimbursement accounts (HRAs) and other mitigation measures designed to offset the increased out-of-pocket costs paid by retirees and employees with chronic medical needs. Among the measures outlined in the Senate proposal is Medicare Part B reimbursement.

Senate leaders included language, protecting retirees and survivors from excessive insurance premium contributions. They also strengthened labors' ability to maintain basic collective bargaining rights, while creating a process by which an impasse can be quickly resolved by a neutral party.

"These are very difficult times and the Coalition understands that some changes, which we do not support, will ultimately be passed. However, the Senate handled this issue in a manner that respects and shows compassion for retirees and employees," said Duhamel. "All along, Senators (Ken) Donnelly and (Steven) Tolman have been strong advocates for retirees, especially pushing for mitigation measures to protect the sickest members.

"Senate President Murray, who understands health care better than most and is a good friend of retirees, made a point of hearing our concerns and taking the necessary steps to protect retirees and survivors. When she asked Senator Clark (Chairwoman, Joint Committee on Public Service) to take the lead on this issue for the Senate, the Coalition knew we would receive a fair shake."

As part of the FY12 Budget, the health care proposals are now before a House /Senate Conference Committee, where differences will be ironed out before a compromise version is released for a final binding vote in late June or early July.

"Our hope is that the House leadership will see fit to support the measures protecting retirees and creating a fair process at the local level," continued Duhamel. "Cities and towns can still save $100 million without taking rights away from employees or harming retirees."

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