Selectmen Set For Change In Employee Health Care

Selectmen Set For Change In Employee Health Care

HARWICH – Town officials and members of the Harwich Insurance Advisory Committee agreed to disagree Monday night on the better avenue to obtain health care for town employees and retirees.

The town employee health insurance advisory group is established by law and charged with making recommendations on health care to selectmen. The committee has recommended the town remain with the self-insured program the town has employed over the past 20 years.

But Town Administrator James Merriam and Financial Director David Ryan are recommending the town switch to the Cape Cod Municipal Health Group, the regional municipal employee group servicing almost all Cape towns.

Two weeks ago Thomas Gould, Chairman of the HIAC, said his group recommends the town stay with the self-insurance program and not switch to the CCMHG program for one simple reason: “It is less expensive.”

This week Merriam put forth his arguments for joining the regional joint purchasing group. He pointed out CCMHG represents 51 governmental units and has 10,000 members which contributes to a stable rate. Merriam also cited assets of the group in excess of $19 million, a sign of a well-run group. Should the town join the CCMHG, Merriam projected the town would save $109,305 in FY09

“Most scenarios save us money in the short run and certainly in the long term,” Merriam told selectmen.

“There is a savings to the town, but there isn’t a savings to the employees who are picking up co-payments and prescription co-payments,” Gould said of Merriam’s projections.

There are a number of issues facing the town as it prepares to switch its health insurance program. One is the absence of an agreement with the Harwich Education Association, which could prevent all town employees from switching to CCMHG if a contract agreement is not reached by July 1. The town and union are scheduled to appear before the state Division of Labor Relations on April 10 on prohibitive practice charges filed by the HEA related to health care.

Blue Cross Blue Shield MA, which manages the town’s self-insurance program, has notified the town it will not offer a health policy to just one segment of the town employees, but they will continue to offer coverage to town employees until town wishes to cancel all groups and convert to CCMHG.

Teacher Richard Houston, a member of the HIAC, asked Merriam what will happen if no agreement is reached.

“I hope the one outstanding bargaining unit aligns itself with the town,” Merriam responded.

Merriam said CCMHG offers employees more plan choices. He said Blue Cross offered five plans, and two of them have been eliminated, while CCMHG offers 12 plans and will be adding three more private fee for service plans.

But Gould cited programs employees now get under the town HMO plan which the CCMHG HMO does not offer, such as chiropractic coverage. Gould and Houston said they have talked with employees who said they will migrate to the CCMHG preferred provider option, which costs more but provides that coverage. Gould said the estimate of migration put together by Merriam and Ryan is much lower than anticipated by HIAC.

“You should know that to join CCMHG it will cost you $50,000 to $200,000,” Gould said.

It will have a financial impact on the town, Gould said. “I don’t want to be up here next year saying we need and extra $200,000,” he said. Gould added he was laid off after the override failed and he does not want to go through that process again.

Gould and Merriam said they can agree to disagree on the costs associated with the programs. Merriam also pointed out there is a lot of guess work with costs associated with the self-insurance program. He cited the number of claims that get filed, administration and stop-loss impacts.

“When it comes to this matter their necks are on the line,” Board of Selectmen Chairman Robin Wilkins said of Merriam and Ryan’s projections. “They’ll be accountable if their numbers are wrong.”

Selectman Larry Cole said the town has already negotiated the change to the CCMHG in six town contracts, and if they were to follow the recommendation of the HIAC it would require going back and re-opening negotiations.

The town has an extended time frame to April 4 to make the final decision to join CCMHG, but Wilkins pointed out the board voted in January to join. He said “the larger the risk pool the greater the safety net.”

But Houston said with that larger risk pool comes a loss of control. He said instead of one group voting on an issue there are 51 government entities making decisions. Houston also said he does not want to give control to a group whose rates are going up quicker than the town’s insurance rates.

“My contention is this is not going to save the town money,” Houston said. “I’m not opposed to joining a larger group, but I’m not in this to help out other towns.”

“The immediate savings may not be evident now, but we’re in it for the long term,” Wilkins responded. “It’s a leap of faith. It’s a different model.”

Selectman Peter Piekarski said the information provided to the town by the town administrator and financial director is different than that of the advisory committee and it shows a savings.

“They have a different conclusion based on different judgments of what’s going to happen,” Houston replied.

Selectmen were steadfast in maintaining their earlier position of moving to CCMHG as of July1, if an agreement can be reached with the Harwich Education Association.

3/20/08