Resolution Calling for Health Insurance Plan Design Authority for Cities and Towns (2011)

As adopted by the members on January 22, 2011.

Whereas, the Commonwealth of Massachusetts is facing a deep and abiding fiscal crisis caused by the worst national and global recession in the past 70 years; and

Whereas, local aid to cities and towns has been dramatically reduced by the Commonwealth for three years in a row, forcing deep cuts in essential municipal services, eliminating thousands of municipal workers, and increasing reliance on the regressive property tax; and

Whereas, the cost of health care delivery continues to increase faster than inflation, driving up the cost of health insurance for all private and public employers, and the problem is so severe that for many cities and towns the increase in costs exceeds the annual allowable increase in the property tax levy; and

Whereas, the likelihood of a fourth year of local aid reductions combined with ever-increasing health insurance costs will guarantee further service reductions and municipal job losses; and

Whereas, municipal health insurance plan design is woefully misaligned when compared with the Commonwealth’s plan design, and especially when compared with private-sector health insurance plan design; and

Whereas, cities and towns in Massachusetts have been denied the authority to manage and decrease taxpayer-funded health insurance costs because of a restrictive state law that requires municipalities to collectively bargain and obtain union approval for even the most basic changes in the design of health insurance plans, including co-pays, deductibles and other features; and

Whereas, the Commonwealth of Massachusetts has exempted itself from any such collective bargaining restrictions or requirements and has routinely managed and reduced its own health insurance costs for state employees through unilaterally determined plan design changes to co-pays and deductibles; and

Whereas, every news organization that has editorialized on the issue of plan design has supported the MMA position to exempt local plan design decisions from collective bargaining; and

Whereas, private-sector business and taxpayer advocacy groups such as the Massachusetts Taxpayers Foundation, Associated Industries of Massachusetts, The Boston Foundation, and the Business Roundtable have supported the MMA position; and

Whereas, the municipal labor unions have steadfastly refused to accept any compromise that would alleviate this problem and have continued to deny that the problem even exists; and

Whereas, continuing to deny cities and towns the same management authority that the Commonwealth of Massachusetts uses to reduce health insurance costs will force municipalities and local taxpayers to continue to pay an unnecessarily high share of local budgets for health benefits, will force cities and towns to eliminate municipal positions from the workforce, and will further cut the essential education, public safety, public works and other core services that are vital to future economic growth and are rightly expected by the citizens of our communities;

Therefore it is hereby resolved by the members of the Massachusetts Municipal Association as follows:

• The cities and towns of the Commonwealth hereby call upon the governor and the Legislature to recognize that the time for real reform has come and that real reform must happen early in 2011 in order to avoid profound service reductions and job loses, and that further delay will harm the taxpayers, residents and the economic future of Massachusetts; and

• The cities and towns of the Commonwealth must be given the same authority that the state has to change, update and modernize the design of municipal health insurance plans; and

• The cities and towns of the Commonwealth must be provided with the authority to determine plans and change health insurance co-pays and deductibles at least up to the level of the co-pays and deductibles in comparable plans that the Commonwealth offers to its own employees; and

• All eligible municipal retirees are required to enter the federal Medicare program for health insurance; and

• A copy of this resolution shall be presented to the governor and the members of the Legislature on behalf of the cities and towns of the Commonwealth.