Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Jay Gonzalez
Secretary, Executive Office for Administration and Finance
State House, Boston
Dear Secretary Gonzalez,
On behalf of cities and towns across the Commonwealth, the Massachusetts Municipal Association is submitting formal comments to you regarding 801 CMR 52.00, the proposed permanent regulations on Municipal Health Insurance that you are promulgating to succeed the emergency regulations issued pursuant to subsection (h) of Section 21 of Chapter 32B of the Massachusetts General Laws, as enacted by Chapter 69 of the Acts of 2011.
The intent of Chapter 69 of the Acts of 2011 is to provide cities and towns with the ability to implement changes in municipal health insurance plans that will provide taxpayers with immediate savings in fiscal 2012 and beyond. It is imperative that the permanent regulations promulgated by your office provide clear and unfettered access to all of the advantages and authorities granted to municipalities under the new law.
Specifically, subsection (h) limits the regulations to “establishing administrative procedures for negotiations with the public employee committee and the municipal health review panel.” We respectfully request that the regulations issued by your agency respect the scope stated in the statute. Thus, the regulations should be limited to administrative procedures only, such as timelines, the form of notice, quorum requirements and similar administrative matters. The regulations should not include any extraneous issues or matters that would restrict the ability of cities and towns to act, impose any substantive restrictions or requirements on the negotiation process in sections 21, 22 and 23 of Chapter 32B, or seek to interpret other sections of Chapter 69 of the Acts of 2011, all of which would clearly be beyond the proper scope of the regulations. Consistent with this statutory limit, we strongly urge you to remove the weighted vote process for the PEC established by Section 52.01(2), and the unfunded reporting mandate in 52.07(2), as these sections are clearly beyond the scope of the regulatory authority authorized by Chapter 69.
We offer the following comments on the regulations, and respectfully and urgently ask that you incorporate these comments into the final version that you implement as permanent regulations. We believe that a number of provisions of the regulations must be changed, otherwise the effectiveness of the new law will be impaired, and cities, towns and taxpayers may not realize the full benefits of the reform as envisioned upon its enactment.
A. PROVISIONS THAT LOCAL GOVERNMENTS OPPOSE AND RECOMMEND BE REVISED OR ELIMINATED
In this section of our comments, we highlight the provisions of the regulations that would erode, weaken or create significant problems in implementing the law, in the order in which they appear in the regulations, and ask you to amend the language to protect the intent of the law and the strength of the reform.
1) PUBLIC EMPLOYEE COMMITTEE VOTING. In 52.01(2), in the definition of the Public Employee Committee, we strongly object to the unilateral decision to impose a weighted vote process for the PEC. This would grant one or two unions excessive power to control this process. We believe the law is clear that there is no weighted vote, and the regulations should not grant a weighted vote when the legislative intent is otherwise. We believe the regulation is flawed in two ways: it goes beyond your regulatory authority under Chapter 69 of the Acts of 2011, and it misinterprets the statute. The legislative intent is clear: votes conducted by the PEC are to be on a one-union, one-vote basis. As a matter of sound public policy and taxpayer protection, the regulations should reflect the equal vote requirement as provided in the statute. Otherwise, municipalities would be negatively impacted because certain collective bargaining units would gain significant and unjustified control over the outcome of the 30-day negotiation period, and they could use that control to attempt to leverage or demand concessions in other unrelated wage or benefit contract negotiations.
The vote process for the Public Employee Committee (PEC) is established in subsection (b) of Section 21 of Chapter 32B of the General Laws, as created by Section 3 of Chapter 69 of the Acts of 2011. The relevant language in subsection (b) of Section 21 of Chapter 32B reads:
“… the appropriate public authority shall give notice to each of its collective bargaining units to which the authority provides health insurance benefits and a retiree representative, hereafter called the public employee committee …”
and in subsection (c) of Section 21 of Chapter 32B:
“An agreement with the appropriate public authority shall be approved by a majority vote of the public employee committee; provided, however, that the retiree representative shall have a 10 percent vote.”
The statute is clear that the only weighted or proportional vote on the PEC shall be reserved for the retiree representative (10 percent). Thus, the statute clearly requires that the voting procedure for the PEC shall allow each collective bargaining unit an equal vote for the remaining 90 percent. We understand that a small number of self-interested municipal unions are purporting that the PEC vote is weighted based on the number of members represented by each bargaining unit. But their desire for special treatment is not enough to alter the legislative intent.
If the Legislature in any way intended a weighted vote by the collective bargaining units, the statute would say so, either directly or by reference to Section 19 of Chapter 32B. The legislation does neither. In fact, the conference committee’s description of the new law, in their written summary of the legislation provided to senators and representatives before the vote to adopt the conference report, specifically stated that “the public employee committee shall accept any agreement by majority vote; provided, however, that the retiree representative shall have 10 percent of the vote.” There is absolutely no mention of a weighted vote for the collective bargaining units and no reference or indication of any relationship with the completely separate approval process for another form of PEC that is created in and used exclusively for Section 19 of Chapter 32B.
2) BARGAINING STANDARD. On behalf of all cities and towns, the Massachusetts Municipal Association opposes the provision in 52.04(2) that states that “[T]he parties are encouraged to negotiate in good faith.” While the association recognizes that the provision is exhortatory, we believe that any reference to “negotiating in good faith” is subject to misunderstanding and misapplication. Negotiating in good faith is a concept that has developed layers of meaning under the country’s and Commonwealth’s labor laws. We are concerned that certain parties may attempt to import from labor law a mandatory meaning for that term.
We request that the final regulations omit the second sentence from 52.04(2). If, however, you feel that some expression of encouragement is necessary, we would suggest language such as: The parties are encouraged to use their best efforts toward reaching a negotiated agreement.
The Legislature, in the final draft of Chapter 69 of the Acts of 2011, did not include any “good faith” language. In fact, this wording was struck by the conference committee. As such, the legislative intent is explicit: there is to be no such standard for the negotiations.
Any introduction of this language on a permanent basis could inadvertently create a new legal hurdle for cities and towns. The negotiations established in Section 21 of Chapter 32B are NOT collective bargaining negotiations under Chapter 150E of the General Laws, but this proposed encouragement language could lead to the imposition of such a standard, which is not what the legislation intends or establishes. The introduction of “good faith” language is a potential legal trap for cities and towns. Any municipal union could, at any time during the 30 days, claim that an appropriate public authority is not acting in good faith. Under some legal interpretations, certainly those put forth by some unions, cities and towns could be vulnerable to such charges if they refuse to change the plan design proposal during the 30-day period. The unions could seek to immediately stop the clock, freeze the process and proceed to court or to the Labor Relations Commission, delaying the entire process for weeks or months. This would make it extremely difficult for all cities and towns, including those in regional joint purchase groups, where even one such claim in one community could slow down the entire process for dozens of cities and towns.
3) IMPLEMENTATION TIME PERIOD. In 52.07(1), we are concerned about the language that requires implementation of any changes to be implemented within 90 days unless the PEC and the municipality agree otherwise. Absent an agreement with the PEC, this language would either force all cities and towns to implement mid-year changes in all future years, or it would provide a narrow window for negotiations by most communities each year to February and March, clogging the system. If a community’s health plan year is July 1 to June 30, and the locality wishes to implement the changes for the upcoming policy year, the community should have that latitude without being forced to wait until mid-February to begin the process. Under the language in the emergency regulation, mid-February to April 1 would be the time period for the 30 days of negotiation and 10 days for the review panel, with implementation of any changes coming on July 1. Forcing the negotiation period to take place during this concentrated time could create a significant strain on the time and availability of the impartial member of the Municipal Health Insurance Review Panel. The solution would be to allow the appropriate public authority to establish the time period for implementation of the changes, which we believe is consistent with the statute.
The Southeastern Massachusetts Health Group, in its recent submission to you, makes the point well. The group’s comments included, in part, the following discussion, which we repeat here to underscore our agreement:
“It is respectfully submitted that the ninety (90) day window for implementation is needlessly short. Given the requirement that the appropriate public authority provide sixty (60) days’ notice to subscribers prior to implementation, that window is effectively reduced to thirty (30) days.
“It is likely that the majority of governmental units that choose to make plan design changes pursuant to Section 22 will wish to implement those changes on the first day of their plan year. Under 52.07 (1), in order for a governmental unit to implement those changes on the first day of its plan year, there will need to be either (1) a written agreement executed by the appropriate public authority and the public employee committee, or (2) a decision issued by the health insurance review panel between sixty (60) days and ninety (90) days before the first day of the plan year. If the appropriate public authority could be sure that, by initiating the statutory process on a specific date, it would have a written agreement executed or a panel decision issued within that thirty (30) day period, the 52.07 (1) implementation requirement would be workable. But there is no “safe starting date” that the appropriate public authority can select.
“For example, it is easy to imagine the date of execution of a written agreement occurring more than thirty (30) days earlier than a panel decision would issue (if a written agreement was not reached). Even if the appropriate public authority scheduled its starting date with the assumption that a written agreement would not be reached, it would still not be possible for it to predict with certainty that a written decision would issue from the panel between 60 and 90 days before the first day of its plan year. While the timelines in the regulations are artfully calibrated to ensure an expedited process, those timelines include enough flexibility that it is impossible for an appropriate public authority to predict with any degree of certainty, on the date that it commences the statutory process, the date that a written decision will issue from the panel. (This is particularly true since these regulations provide no time limit within which the chairman of the panel must schedule the panel’s first meeting.)
“However, if the appropriate public authority underestimates the length of time that the process will take, and the panel’s decision issues more than ninety (90) days before the first day of its plan year, it presumably will be required to implement the changes prior to the date upon which the savings estimates, etc., were based. Alternatively, if the appropriate public authority underestimates the length of time that process will take, and the panel’s decision issues less than sixty (60) days prior to the first day of its plan year, it will be delayed in implementing its changes until after the beginning of the plan year.
“Simply stated, the requirement in Section 52.07 (1), that implementation occur between sixty (60) and ninety (90) days following the execution of the written agreement or issuance of the panel’s decision inserts an unnecessary complexity into the statutory process. We question whether any maximum timeframe between agreement/issuance and implementation is necessary. (We understand the regulations’ requirement that implementation occur no earlier than sixty (60) days after agreement/issuance.) However, if the Secretary is convinced that an outside time limit is necessary, we would urge that it be set at one hundred and fifty (150) days. With that outside limit, the appropriate public authority should be able to select a starting date for the statutory process that allows for delays (or speed-ups) in the statutory process that could not be anticipated.” (The MMA suggests 180 days).
4) UNFUNDED REPORTING MANDATE. In 52.07(2), as noted earlier, we strongly object to this language, as it imposes an unfunded and mandated cost on cities and towns across the state, completely unsupported by Chapter 69 of the Acts of 2011. This regulatory reporting mandate appears nowhere in the law, and we believe there is no authority to impose this requirement on localities. This provision would force cities and towns to create costly and unnecessary reports for submission to the Executive Office for Administration and Finance each year. The legislative intent is for Chapter 69 to be a local option statute, and imposing a reporting process for those who defer implementation for any reason is not in the law.
B. PROVISIONS THAT ARE OF CONCERN OR COULD BE SIMPLIFIED
In this third section of our comments, we highlight the provisions of the emergency regulations that are unclear or raise some concern and ask that you consider clarifying or amending these provisions to ease implementation.
1) NOTIFICATION REQUIREMENTS. We object to the requirement contained in 52.02(1) that the appropriate public authority notify each collective bargaining unit and the Retired State, County and Municipal Employees Association that the political subdivision intends to adopt the provisions of Chapter 69 of the Acts of 2011. Chapter 69 is a local-option statute and we are unaware of any other local-option statute that required notification by registered mail of the intention of the municipality to adopt the statute. We believe that the Open Meeting Law provides sufficient notice to collective bargaining units of the appropriate public authority’s intention to adopt Chapter 69.
To the extent that the regulations, in 52.01(3) and 52.02(1), prescribe any specific method of notification via certified mail, delivery confirmation and return receipt, we are concerned that in some instances a party may refuse to accept notice, which could unnecessarily delay the process. A simple solution would be to require that the appropriate public authority secure a “Certificate of Mailing” from the United States Postal Service, which is a receipt that provides proof of mailing with the date and must be purchased at the time of mailing. This would simplify matters, as the Certificate of Mailing would be proof of timely notification.
2) HEALTH INSURANCE REVIEW PANEL PROCESS. In 52.06(4)(a), the review panel is provided 10 days to approve the appropriate public authority’s implementation of plan design changes under Section 22 of Chapter 32B, or a transfer to the Group Insurance Commission under Section 23 of Chapter 32B. We have two key concerns about this panel review process in the emergency regulations.
First, there is no time period within which the impartial third member of the panel (who acts as chair) must call the first meeting of the panel. This could result in unnecessary and harmful delays. Thus, we ask that the permanent regulations require the first meeting of the review panel to be scheduled within a swift and reasonable period of time after the expiration of the 30-day negotiation period.
Second, while the emergency regulation implies some sequencing of the issues before the panel, the current draft does not require the panel to immediately determine whether the appropriate public authority’s proposal meets the requirements of subsection (d) of Section 21 of Chapter 32B. We believe that the intent of the law is for this determination to be made immediately by the review panel as the first order of business. Chapter 69 of the Acts of 2011 places this as the first matter before the review panel and sequences the matters before the panel as follows: 1) determination that the plan design changes or transfer to the commission meets the threshold requirements in the legislation; and 2) after the first step, the panel considers the other issues (confirming the savings and reviewing the mitigation plan), and concludes action on these other issues by the end of the 10-day period. We believe that the regulations would be improved if the regulations clarify that the panel should immediately answer the question of whether the proposed the plan design changes or transfer to the commission meets the threshold requirements in the legislation, and if the answer is yes, grant immediate approval. After that determination, the panel would have 10 days to confirm the savings and review the mitigation plan.
3) CLARIFICATION OF THE CO-PAYMENTS USED AS THE BENCHMARK IN TIERED AND NON-TIERED PLANS. In 52.01(2), in the definition of “Maximum Possible Savings,” the emergency regulations address the situation of what the benchmark co-payment is if a city or town does not seek to implement a tiered plan, given that the benchmark plan offered by the commission is a tiered plan. Identifying the midpoint tiered co-payment is a fair and appropriate way to clarify this matter, which we fully support. We respectfully suggest, for maximum clarity, that you also clarify the language in 52.06(4)(a)(1) and (2) to underscore that the commission’s midpoint tiered co-payment would be the benchmark co-payment for municipalities that do not have a tiered plan. The current language attempts to do this, but does so in a reference to calculation of savings. We also strongly support the existing “same or most similar benefits” language in these sections, as there may be slight differences between the plans that localities offer now, and the plans offered by the commission. The language must be written with great care, as the law is written expressly to address the increase of co-payments and deductibles up to the commission level, and is NOT written to require that communities change their current plan benefits to mirror the commission’s. Any such provision would violate the law and be extraordinarily burdensome and costly for cities and towns. The emergency regulation appropriately recognizes this fact. We recognize that this is a very complex part of the statute and regulations and we suggest language similar to the following for your consideration for 52.06(4)(a)(1) and (2), starting on line 493:
“Where the carrier or third-party administrator for a governmental unit’s health plan does not offer tiering of a particular provider category (e.g. specialists’ services) that is tiered in the non-Medicare plan under Section 4 of M.G.L. c. 32A with the largest subscribers enrollment, the governmental unit may include in its health plans a co-pay or deductible for that particular provider category that is equal in dollar amount to the Tier 2 co-pay for that provider category in the above described non-Medicare plan offered under Section 4. Where the governmental unit offers a tiered provider network for a particular provider category that is tiered differently from the tiered provider network in the commission’s most subscribed plan for that particular category, the maximum dollar co-pays or deductibles for such tiering features shall be the same as those in the same tier of the commission’s most-subscribed plan, beginning with a comparison of the highest tier. If the governmental unit’s plan has fewer tiers for a particular provider category than the commission’s most subscribed plan, the governmental unit may include a co-pay or deductible for its plans’ higher tier up to the dollar amount of the commission’s tier 3 co-pay or deductible for that service, and a co-pay or deductible for the plans’ second highest tier up to the dollar amount of the commission’s tier 2 co-pay or deductible for that service. In each of the above cases, such co-payments or deductibles shall not be considered to exceed the dollar amounts of the plan design features for the commission’s most-subscribed plan for purposes of this sub-section.”
C. PROVISIONS AND RECOMMENDATIONS THAT LOCAL GOVERNMENT SUPPORTS
1) DISSOLUTION OF THE PEC AND THE MUNICIPAL HEALTH INSURANCE REVIEW PANEL. The law clearly intends that the Public Employee Committee and the Municipal Health Insurance Review Panel only exist during specific time periods to discharge specific responsibilities during the process, and that they cease to exist after the process has been concluded. Establishing these entities as permanent bodies would clearly be inconsistent with the law and would create an unnecessary burden on municipalities. We strongly support the language in 52.01(2) and 52.06(4)(d) that follows the statute and clarifies that these entities dissolve when the process is completed.
2) EXCLUDING SAVINGS DUE TO ENROLLMENT IN MEDICARE FROM THE OVERALL CALCULATION OF SAVINGS. The new law mandating enrollment in Medicare for all eligible retirees is a separate part of Chapter 32B, and was implemented outside of Chapter 69 of the Acts of 2011. Thus, we support the clarification in 52.03(c)(iii) that the appropriate public authority’s estimate of savings shall not include any savings due to the enrollment or transfer of retirees to Medicare under Section 18A of Chapter 32B.
3) ALLOWING NEGOTIATIONS TO TAKE PLACE IN A PUBLIC SETTING. We believe that language should be inserted into 52.04 allowing the appropriate public authority to determine whether any negotiation session with the PEC should be open to the public, so that local citizens can understand the issues that are being discussed. The appropriate public authority should have the sole authority to determine whether any session is open to the public. The PEC is not a governmental entity and thus should not have a role in this decision.
SUMMARY
On behalf of the 351 cities and towns represented by the Massachusetts Municipal Association, we respectfully and urgently request that you incorporate these positions and recommendations into the final regulations.
Again, we thank you and Governor Patrick for your attention to this vital matter of concern and priority to cities, towns and taxpayers across the Commonwealth.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA