Joining state's pool needs approval
07 05 08 - 13:11
By Tony Dobrowolski, Berkshire Eagle Staff
Article Last Updated: 05/07/2008 08:33:39 AM EDT
PITTSFIELD - After exploring several health insurance scenarios over the last three months, a committee of city officials has found that Pittsfield could have saved $5.6 million this fiscal year if it had joined the state's insurance pool.
Following those findings, Mayor James M. Ruberto announced he will submit a petition to the City Council within the next few weeks that would allow officials to engage in coalition bargaining with Pittsfield's 18 municipal unions to join the Group Insurance Commission.
The GIC has administered health benefits for state employees and retirees since 1955. Last year, the Legislature passed the Municipal Partnership Act, which allows cities and towns to join the GIC as part of the same risk pool, which has more than 294,000 members.
In order for Pittsfield to join the GIC, all 18 of the city's collective bargaining units have to agree to the measure by a margin of at least 70 percent of a vote "weighted" along each union's membership. The unions normally negotiate contracts with the city separately, under the process that is known as collective bargaining. But the GIC negotiations require the unions to negotiate with the city as
one group, a method known as coalition bargaining.
"There are complications and complexities with the unions themselves to determine if they want to engage in coalition bargaining," Ruberto said. "The first step is the authorization that the two parties are willing to talk."
The heads of nine collective bargaining units were among the 22 people in attendance Monday night when the health insurance committee's findings were revealed at a special meeting of the City Council.
Holly A. Taylor of True North Financial Services, the city's health insurance broker, has told the City Council that the city could initially save millions of dollars by joining the GIC, but that those savings could dissipate due to the cost of getting all 18 unions to agree to the plan.
The earliest the city could join the GIC is fiscal 2010. The city would be required to notify the state by October to have city employees receive GIC health insurance benefits by July 1, 2009.
The nine-member health insurance committee, which includes four city councilors, Ruberto, and four city officials, was formed in January to explore the option of having the city join the GIC. The committee examined health insurance trends in Pittsfield over the last 10 years and compared the city and the GIC plans under various scenarios in a 27-page report.
The committee found the city could have saved $5.6 million in fiscal 2008 by comparing the total health insurance costs for Pittsfield's employees and retirees with a GIC cost scenario in which the entire city pool of employees and retirees was split evenly between health maintenance organization and preferred provider plans. The committee believed that scenario was the most likely option if Pittsfield joined the GIC.
The total fiscal 2008 costs under Pittsfield's current health insurance plan are $23.4 million, while the total costs under the GIC scenario were $17.8 million.
Ward 5 Councilor Jonathan N. Lothrop, who chaired the committee, said joining the GIC would keep health insurance costs down. Taylor told an employee commission last week that Pittsfield's health insurance costs are scheduled to increase 8.6 percent in fiscal 2009, with the city's share expected to rise by $1.6 million.
"In order for us to continue to have good health benefits, we have to bring in an affordable cost," Lothrop said. "We need to explore this option."
Lothrop said there are "accommodations" within the GIC plan to pay for a community's catastrophic health insurance claims. A large number of catastrophic claims caused Pittsfield's total health insurance costs to increase 18 percent in fiscal 2007.
The committee also found that city employees who currently pay 20 percent of their health insurance costs would realize annual savings of $451.44 on individual plans, and $1,025.76 on family plans under the GIC. The city, which picks up 80 percent of its employees health insurance costs, would save $1,805.76 annually on individual plans and $4,102.80 on family plans.
The GIC has 10 individual health insurance options as compared to four in the city's plan, and some of the GIC's individual co-pays are higher than the city's.
Ward 3 councilor and committee member Linda M. Tyer said that city employees should determine which GIC option best suits their needs.
"Look at your own financial resources and health needs and decide which of the plans works best for you and your family," she said.
To reach Tony Dobrowolski: TDobrowolski@berkshireeagle.com, (413) 496-6224