Senate passes Municipal Health Insurance changes

The Senate budget “provides a voice for educators and other municipal employees in bargaining over health insurance and represents improvement over earlier proposals,” MTA President Paul Toner said after the plan was passed on the night of May 26. “But it also curtails the current bargaining process, which has served us well, and we will advocate for further improvements between now and the time a final bill is signed by the governor.”

The MTA is currently analyzing the budget and is taking a hard look at every provision it contains concerning the process for changing health insurance to reduce costs for cities and towns hit hard by the recession.

“The Senate plan protects retirees and the very sick while saving cities and towns more than $100 million,” Toner said. “It shows an appreciation of the role that medical care plays in the lives of our members, and it includes provisions to mitigate high costs for the sickest among us.

“Throughout this process, our principles have been to protect retirees, to preserve the economic security of the sickest among us, to provide a meaningful voice for public employees, and to ensure a fair dispute-resolution procedure,” Toner continued. “We have been pressing for these principles throughout the legislative process, and there will be no letup in our members’ activism until a final budget is signed.”

The provisions the Senate proposal contains are an improvement over those in the budget passed by the House of Representatives on the night of April 26. The House budget – approved by a vote of 113 to 42 – called for giving municipalities the unfettered right to force employees into the GIC or to make plan design changes increasing employee costs to GIC levels.

The Senate budget sets out a 30-day timeline for local coalition bargaining that begins when a municipality provides unions with its proposals to change health care plans or seeks to have employees transferred to the state Group Insurance Commission. The proposal by the city or town must set out any changes in plan design that are being sought, along with the dollar amounts of estimated savings. Supporting data must be provided.

If agreement cannot be reached, the Senate proposal then allows a 10-day process for a three-member review panel to resolve disputes. One member would be appointed by unions and one by the municipality. The third member would be a neutral party chosen from a pool named by the state secretary of administration and finance.

The review panel could determine how much of the money saved – up to 33 percent – would go into Health Reimbursement Accounts or be used for other mechanisms to protect individuals and families with high medical costs, in order to limit the burden of increased co-pays and deductibles.

It could approve a municipality’s proposal to move employees into the GIC if – and only if – the savings achieved by transfer to the GIC exceeded by 10 percent the amount that could be saved through changes in the design of local insurance plans. If the panel ruled that savings would not meet the 10 percent threshold, the parties would restart negotiations to achieve savings by changing plan design.

The Senate plan includes some proposals that reflect a plan offered by the MTA and other unions in March in an effort to protect quality, affordable health care.

The Senate changes were won only through a strong lobbying effort by union members from throughout the Commonwealth.

The MTA is part of the Public Employees’ Coalition on Municipal Health Insurance, which also includes the Massachusetts AFL-CIO, the Professional Fire Fighters of Massachusetts and unions representing police officers and other types of government employees.

The coalition, which had lobbied to protect collective bargaining during the House debate, continued to press hard for changes as the Senate considered the issue.
The MTA played a major role in those efforts. More than 700 members came to Boston to lobby at the State House on April 28, meeting with both state representatives and state senators. In addition, thousands of educators e-mailed or called their legislators.

The association set up a system for patch-through calls to Senate offices, generating thousands of calls, and used direct mail to encourage member activism. Between May 20 and the morning of May 26, more than 2,000 educators used the MTA website to send e-mails to their senators urging them to protect collective bargaining and the economic security of retirees and the very sick.

Now the debate moves to a House-Senate conference committee that will produce a budget to send to the desk of Governor Deval Patrick. The governor can sign provisions, veto them or send them back to the Legislature with amendments. The deadline to have a state budget in place is July 1, which marks the start of fiscal year 2012.

As the process moves forward, the MTA will keep members apprised of what is happening on Beacon Hill and call on them to contact key legislators and the governor as needed to protect the gains in the Senate proposal and seek further improvements.

Key provisions in the Senate version of the budget:

  • Ensure that health insurance decisions are made at the local level, not by state mandate.
  • Require a vote by a city council or board of selectmen every time a municipality wants to trigger the new process to achieve savings.
  • Prevent municipal managers from dictating the specifics of networks or provider changes.
  • Make it clear that the 30-day period for expedited coalition bargaining does not begin until municipal managers provide their health insurance proposals, along with the dollar amounts of estimated savings and supporting data.
  • Give the three-member review panel expanded authority over the scope initially proposed, allowing it to confirm or revise cost estimates provided by the municipality and to decide how savings can be used to mitigate costs.
  • Narrow municipalities’ authority to move employees into the GIC by setting a threshold. The threshold states that unless the difference between GIC savings and plan design savings exceeds 10 percent, no such action can be taken.
  • Prohibit mid-year changes in GIC health plans except under extreme fiscal circumstances.
  • Protect retirees by establishing premium splits that are the average of the highest and lowest union percentages and by not forcing subscribers with family members or dependents on other health plans to enter Medicare when they reach the age of eligibility.
  • Protects any collective bargaining agreements that specify co-pays and deductibles.

Toner said that throughout the budget process, the unions have made it clear that they are willing to engage in a constructive process that saves money for hard-pressed cities and towns to save jobs and essential services.

“That does not mean we will give up our right to advocate for our members and their families,” he said. “We will be calling on our members, who have been crucial to winning the improvements realized thus far, to remain fully engaged as the rest of the legislative process unfolds.”


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