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BURLINGTON

Untried tack on health coverage

Officials consider narrowing options

By John Laidler
Globe Correspondent / December 5, 2010

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Burlington may be venturing down a new path in the effort by cities and towns statewide to rein in spiraling health care costs.

Selectmen are considering a cost-saving change in the design of the town’s health care program, even if they fail to obtain the agreements from town unions that state law requires.

The change would eliminate two traditional HMO plans that have no deductibles, forcing employees and retirees to shift into high-deductible plans. The vast majority of the town’s health insurance subscribers are enrolled in the no-deductible plans.

Town Administrator Robert Mercier said selectmen were spurred to pursue the change after the town learned it faces a 20 percent premium increase in 2011 for the two no-deductible plans — one offered by Blue Cross Blue Shield of Massachusetts, the other by Harvard Pilgrim. For the town, which pays 70 percent of premium costs, that would mean a $1.8 million annual cost increase, or $800,000 to $900,000 in the second half of this fiscal year.

“The Board of Selectmen have made it pretty clear they cannot live with a $1.8 million increase on the town side,’’ Mercier said.

The discussions in Burlington come as municipal leaders across the state have been pressing the state Legislature to give them authority to make cost-saving changes to the design of their health care plans without collective bargaining.

Burlington, which has been in an open enrollment period for its self-administered health insurance program, has been actively encouraging members to voluntarily move into the high-deductible plans.

Officials maintain that even though premiums are also rising by 20 percent for those plans, most employees will actually save money. And as a further inducement to join, the town has agreed to pick up half of the annual deductible, which is $1,000 for employees and $2,000 for families.

Subscribers are currently paying $498 per month for the no-deductible Blue Cross family plan and $451 for Harvard Pilgrim, with the cost to members scheduled to increase by $100 to $598 for Blue Cross and by $91 per month, to $542, for Harvard Pilgrim on Jan. 1.

The high-deductible plans will cost families $465 for Blue Cross in 2011 and $388 for Harvard Pilgrim, town officials said.

Selectmen have discussed dropping the no-deductible plans altogether, even in the absence of union agreement. On Nov. 8, the board voted, 3 to 2, against dropping the plans, but chairman Ralph C. Patuto said those voting against did so to provide more time to educate employees and retirees and for Mercier and Superintendent of Schools Eric Conti to seek agreements from the town’s 12 unions.

Mercier said last week that talks with the various unions have begun or were planned and that the town had received a good response so far. “If nothing is worked out, we cannot ignore the problem facing us financially and we have to make decisions,’’ he said.

At their meeting Dec. 13, Mercier said, selectmen will likely vote again on whether to eliminate the no-deductible plans, with or without union consent. He said it also was possible that if enough subscribers moved to the high-deductible plans, the board could conclude that enough savings had been achieved and opt to take no action.

Mercier said the town is aware that taking unilateral action could expose it to union charges of unfair labor practices.

Edgar McLean, president of Burlington’s firefighters union, said he was open to conversations with the town about doing away with the no-deductible plans provided some cost protections were put in place for retirees or employees nearing retirement.

But McLean said his union would challenge any attempt by the town to make changes unilaterally.

“We are going to protect our rights unless we have an agreement,’’ he said.

Patuto said in the event union agreements cannot be obtained, selectmen would have to weigh the potential liability costs to the town if it were to act unilaterally and incur a legal challenge by unions.

“We know we have a responsibility to the taxpayers, but we also have a responsibility to the 800 town employees,’’ Patuto said. “So we will put everything on the scale and weigh it out.’’

The cost of health care and the desire for state action remains a front-burner issue for leaders in other area communities.

“We are certainly going to make a renewed push in the next legislative session and I’m hopeful the Legislature will see the need to assist cities and towns this year,’’ said Revere Mayor Thomas G. Ambrosino, whose city’s health costs rose by about $1 million this year.

Chelsea City Manager Jay Ash said his city, which absorbed about a $600,000 rise in insurance costs this year, has tried unsuccessfully to persuade its unions to allow Chelsea to join the state employee plan run by the Group Insurance Commission, and more recently to allow the city to create a local version of the commission through which it could make health plan changes with input but no veto power from the unions.

“They understand that something needs to change, but we haven’t been able to get any agreement at all on what that change might be,’’ Ash said.

Beverly Mayor William F. Scanlon Jr. said he is optimistic lawmakers will act on a bill before the next local budget cycle that allows communities to establish such local bodies mirroring the Group Insurance Commission, or to enter the state plan without collective bargaining.

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