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Our members are the local governments of Massachusetts and their elected and appointed leadership.
Nearly 250 local officials from across the state gathered in Milford on Aug. 25 for an MMA-sponsored forum held to explain the complex process now available for adjusting municipal health insurance plans in order to control costs.
The five-hour forum on the Municipal Health Insurance Reform Act featured subject-matter experts from the Executive Office for Administration and Finance, the Group Insurance Commission, and the Social Security Administration, as well as attorneys and health care consultants.
Speakers outlined each step of the process for modifying health plans, joining the GIC, moving eligible retirees into Medicare (as now required by state law), calculating the savings that can be derived from making so-called “plan design” changes, and developing “mitigation plans” to help offset the impact of the changes on subscribers.
Local officials, anxious to realize savings as soon as possible, had numerous questions as they strive to understand the process – laid out by Chapter 69 of the Acts of 2011 as well as emergency regulations issued by the Executive Office for Administration and Finance – and initiate the changes. In some cases, the answers are not yet clear.
Gardner Mayor Mark Hawke, for example, asked about the law’s mitigation plan requirement. The law states that communities must develop a plan to “mitigate, moderate or cap the impact of [proposed health insurance changes] for subscribers, including retirees, low-income subscribers and subscribers with high out-of-pocket health care costs, who would otherwise be disproportionately affected.” To what extent, Hawke asked, are communities expected to tailor their mitigation plans to favor certain employees, and how would they do so in light of federal privacy laws?
“I think it’s pretty clear,” replied Jan Fogel, deputy general counsel with the Executive Office for Administration and Finance, “that the legislative intent of this law was to address individuals who are disproportionately impacted. You’re right that there will be some challenges in how to structure that.”
The statute calls for A&F to provide guidance on this issue, but the guidelines are not yet available.
Lenox Town Manager Greg Federspiel asked whether negotiations with the Public Employee Committee are subject to the state’s open meeting law. Attorney Paul Mulkern said he believes that the meetings would fall under the open meeting law’s exemption for negotiations, but added that the issue is not specifically addressed in the Municipal Health Insurance Reform Act or the regulations issued by A&F. The regulations do, however, specify that meetings of the Municipal Health Insurance Review Panel must be public.
The forum began with a presentation by Mulkern, who outlined, step-by-step, the process for implementing health insurance changes under the new law, which created sections 21, 22 and 23 under Chapter 32B. He pointed out that the new process for changing health plans is not subject to the collective bargaining requirements of Chapter 150E or Section 19. He reminded attendees, though, that insurance premium contribution ratios may not be changed by the new process and are still subject to collective bargaining.
One option available to communities, Mulkern suggested, is to notify unions of the city or town’s intent to vote on the new local-option statute and then, rather than actually taking the vote, beginning direct negotiations with the unions over plan design in the traditional manner, essentially avoiding the process laid out in sections 21 through 23.
Representatives from Administration and Finance covered the emergency regulations issued on Aug. 12. Pam Kocher, A&F’s local policy director, told attendees that her office will be working on permanent regulations over the next 90 days and will allow for a full, 21-day public comment period on the proposed rules.
Kocher stressed the importance of the notice requirements in the law and the accompanying regulations. Given that health insurance is “a personal issue” for employees, she said, ample communication with employees will promote a healthy negotiating environment.
“You’ll see that at every stage of the process, notification is required, whether it’s notification to your employees about moving on to the next stage of the process, or notification to the secretary of A&F that you need a list of three members for a review panel, if you’re at that stage,” she said.
Kocher said the “implementation notice” is the most significant – “a very comprehensive package.” This notice tells public employees of the city or town’s intent to enter into negotiations over health plan changes, what changes are being sought, the estimated savings that would result, an analysis that supports the savings estimate, and the details of a mitigation plan.
“That’s really your game plan for what you’re going to do and how it’s going to affect everybody,” Kocher said.
A copy of all notices, as well as a copy of any agreements reached by the Public Employee Committee and the municipality, or decisions reached by the Municipal Health Insurance Review Panel, must be sent electronically to the Executive Office for Administration and Finance at MunicipalHealth@state.ma.us.
She also reminded attendees that federal law requires a 60-day notice to subscribers before health insurance changes can be implemented.
Margaret Houy, a senior consultant with Bailit Health Purchasing, covered the process for estimating the cost savings that would accrue from changes to employee health plans. She pointed out that calculating the “maximum possible savings” is a requirement of the statute.
Albert Jones, the president of Jones Financial Group, discussed the development of mitigation plans.
In the afternoon, Gregory Mills, a public affairs specialist with the Social Security Administration, discussed the process for enrolling eligible retirees in Medicare, and Dolores Mitchell, executive director of the Group Insurance Commission, discussed the process for transferring employees into the GIC.
Mitchell said the GIC may not be the best answer for all communities. She added that the commission will continue to enforce its existing entry and eligibility requirements.
“We’ve kept our premiums low not just because we’re big,” she said, “but because we have rules and we enforce them.”
• Download municipal health reform final emergency regulations (92K Word)
• Municipal Health Insurance Reform Legislation and Regulations Timeline, prepared by the MMA (192K PDF)