LOCAL INSURANCE CHANGES LOOM

Proposal Would Mandate Medicare Enrollment

MAY 8, 2009: A special legislative commission, charged with studying municipal reform measures and new local revenue sources, has issued a report that calls for changes in local health insurance plans.

If passed, each local community not currently enrolled in the GIC would be forced to conduct an analysis of their local insurance costs. If local costs are higher than the GIC, on a per enrollee basis, the coalition bargaining process would be triggered and benefits renegotiated in order to lower local insurance costs. Retirees would have a seat at the bargaining table under this proposal.

Under the coalition bargaining process, also known as Section 19, a retiree representative (appointed by the Association) would participate in negotiations between the retirees, active employees and the local government. The retiree and employee representatives would comprise what is known as a Public Employee Committee (PEC), in which retirees have a 10% vote. 70% of the PEC must vote in the affirmative to approve an agreement with the local government.

According to the report filed by the Special Commission, if the PEC and local government cannot reach an agreement that brings insurance costs into line with those of the state GIC, state aid would be reduced. However, if the community and PEC reach an impasse with negotiations, a mediator would be appointed to resolve the dispute.

The report also proposes that all local sections, eligible for Medicare, be required to enroll in the federal program. Currently, individual cites and towns can adopt a local option law (Section 18 and 18A) that requires that Medicare eligible retirees to enroll.

A hearing on the Special Commission’s proposal, along with pending legislation, is scheduled to take place at the State House on May 12, 2009. The Committee on Municipal and Regional Government will conduct a second hearing on the matter at the Hudson Town Hall on Friday, May 15. Legislative sources indicate that a bill will likely advance in the House and be voted on prior to the end of May.

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