House Speaker, Ways and Means propose major municipal health insurance reform

The fiscal 2012 state budget proposal released by the House Ways and Means Committee today includes a significant reform of municipal health insurance.

The reform would give cities and towns the same power the state has to implement changes in municipal health insurance plans, a provision that would save local taxpayers up to $100 million in avoided costs.

• Statement of the MMA endorsing the House’s municipal health insurance reform proposal

Municipalities would be able to modernize the design of their employee health plans outside of collective bargaining, with a guarantee that all municipal and school employees would still have health plans that are the same as or better than what state employees receive. This means that no city or town would be able to use this authority to implement higher co-pays or deductibles than state employees have.

Communities would also have the power to join the state’s Group Insurance Commission outside of collective bargaining if they demonstrate that joining the GIC would provide greater financial relief than making plan design changes on their own.

Ten percent of the savings or costs avoided in the first year would be set aside to fund a health reimbursement account that would be structured based on an agreement between municipalities and their unions.

Cities and towns would still negotiate any change in the employee-employer premium share, giving municipal unions more bargaining authority over health insurance than state employee unions. Any co-pays or deductibles higher than the GIC plans would have to be approved in collective bargaining.

The municipal health insurance reform proposal is sections 46 and 47 of the budget bill. Section 44 would require all municipalities to enroll all eligible retirees in Medicare.

Local acceptance would be the same process as used for the original Chapter 32B, which is mayor and council in cities, and a referendum in towns. The Ways and Means Committee is aware that this language is a concern for communities, and it is committed to working with the MMA to develop a local acceptance process that would ensure swift and smooth implementation in communities.

Municipal health insurance reform has been the MMA’s top legislative priority, as skyrocketing costs are forcing cuts in essential municipal and school services and the elimination of teachers, firefighters, police officers and other key employees from local budgets. Local leaders have been saying that they will use this reform to provide relief for local taxpayers, protect essential services, and preserve thousands of municipal jobs.