Unions weigh shift to state's healthcare plan
The town's public employee unions are poised to take a key vote to decide whether Saugus will join the state's health insurance program, which local officials estimate could save more than $2 million a year in medical costs.
Union leaders tonight will hold the second of three forums planned to outline a proposal for the town to join the Group Insurance Commission, which provides health insurance to 286,000 state employees and retired teachers, plus their dependents.
"There is a lot of apprehension with people," said Bill Cross, president of the Saugus firefighters' union. "People have been getting their healthcare a certain way for a long time. There are a lot of unknowns."
Russ Brandwein, president of the union representing Saugus teachers, said, "Different individuals will have different concerns. We're going to share the in formation that we have, but what we can't provide is about how it would affect any one individual."
Communities have until Oct. 1 to decide whether they will join the plan, starting next July 1. It is a key provision of the state's Municipal Partnership Act, proposed and signed by Governor Deval Patrick, to help financially strapped communities lower costs and identify new revenue sources.
Saugus -- which ended the 2007 fiscal year with a $1.2 million deficit in its health insurance account -- has special permission by Patrick to join the program ahead of schedule to help stabilize the town's precarious finances, which have drawn warnings from the state Department of Revenue.
Saugus officials estimate the town could save anywhere from $1.5 million to $2.3 million each fiscal year in health insurance costs. "We cannot afford not to look at this," Town Manager Andrew R. Bisignani said.
If the unions and town reach agreement, Saugus would become only the second community in the state, after the financially struggling city of Springfield, to join the Group Insurance Commission. Saugus could enter as early as January, Bisignani said.
Representatives of the nine municipal unions in Saugus, plus its retirees, have been meeting since July to discuss the possible switch. A first meeting to explain the impact on about 700 town employees and retirees was to be held yesterday, with a second slated for tonight, and a third on Monday. Members of each union will vote on the proposal, at a date still undetermined, before Oct. 1.
Bisignani said the town hopes to reach agreement. "I feel comfortable that the different [unions] recognize the need to move forward with this process," he said. "I'm confident that the outcome will be mutually advantageous."
Saugus now pays 90 percent of employees' healthcare costs and 50 percent for retirees. From 2001 to 2006, the town's health insurance costs grew nearly 110 percent, while the Group Insurance Commission's costs increased by 48 percent over the same period, according to the state Department of Revenue.
The agency is closely watching the outcome of the Group Insurance Commission debate. On Aug. 23, state officials sent a letter calling the town's healthcare deficit "troubling" and said if the town does not opt into the program, "leaders need to explore every option to resolve this problem."
Bisignani said he will take whatever steps are necessary to resolve the deficit, including freezing spending. But he hopes that won't be necessary if the unions agree to join the program.
"We have been working diligently on this for some time," he said. "We have all our ducks lined up, and now we're ready to meet with our bargaining units. I am hopeful."
Joining the Group Insurance Commission requires coalition bargaining, a process by which a committee representing each local union negotiates with municipal leaders. Neither Bisignani nor union leaders would comment on issues that could be subject to negotiations, which could begin next Wednesday.
The process gives each union a weighted vote, based on its membership size. If 70 percent of the weighted vote approves the proposal, then a community has the right to join the commission. The weighted system means the largest unions in a community have the most say.
In Saugus, the teachers' union is the largest, with more than 200 members, followed by the union representing Town Hall employees.
"The teachers are carrying the most weight," said Hank MacKenzie, a retired firefighter who is representing retirees on the committee. "But we will all have a say about how this affects our individual members."
Brandwein said members probably will want to compare notes with retired teachers who already receive their health insurance from the Group Insurance Commission.
"They'll likely want to look at what they're getting," he said. "It's really an individual decision. Just as we do now, people will have to look at the plans offered and how much it will cost them."
Saugus now is self-insured, meaning that the town's healthcare appropriation, plus employees' payroll deductions, are paid into a medical trust fund.
Rates, which are set each year by the town, a consultant, and insurance companies, are based largely on the history of past claims. The town is responsible for all claims up to $75,000, and anything over that amount is reimbursed by an insurance company.
In the last year, a series of major illnesses among town employees created the $1.2 million deficit, which is being paid in the current fiscal year. If Saugus decides to join the Group Insurance Commission, the town no longer would be self-insured.
It would switch to premium-based plans, with the rates and offerings negotiated by the state.
The Group Insurance Commission offers about a dozen coverage plans but does not offer Blue Cross and Blue Shield of Massachusetts, the most popular plan offered by Saugus. A commission official did not rule out that possibility in the future.
Kathy McCabe can be reached at kmccabe@globe.com.
