HomeMy WebLinkAboutHealth Care Premiums 4/21/2004Town of Mansfield
Town Manager's Office
John O. D'Agostino
Town Manager
Telephone (508) 261 -7370
Facsimile (508) 261 -7498
Email townmanaecrAmansaeldma.com
MEMORANDUM
TO: John A. Moretti, Superintendent of Schools
Lincoln D. Lynch, Assistant the
Superintendent for usiness A ar
FROM: John O. D'Agostino, Town
DATE: April 21, 2004
SUBJECT: Health Care Insurance Savings over a Three -Year Period
You have asked for projected savings on health care for employees under a 70/30
premium split for medical coverages. As you know, we need 70% participation in the
dental plan to guarantee dental premium rates. These rates are guaranteed for two years.
The enclosed information assumes the following: that premium increases will occur in
future years at 11.9 %, which is the case for FY2005. We have kept retirees at the 75/25
split and have assumed that 100% of all employees will take dental, which is an option.
While we need a 70% participation rate, 30% of employees may not take dental which
will increase the annual savings from $389,291.19 to a number above $400,000 or
greater. Without the dental offering, the Town would save $714,354.57.
In year two, the savings will climb to $427,742.59 and in year three, the savings will be
$472,488.94. Should premiums increase above the assumption of 11.9 %, then the savings
would be greater than projected. Conversely, the opposite is true if the premium increase
is less than 11.9 %. If we combine the savings in each year, the amount saved would
exceed $1.2 million. If we do nothing, we do not have a savings we can count on in
future years.
TADaily Cornnpondence\liealth Cue Insurance Savings.doc
:Niot 8 e. , Re: Health Insurance percentages _ - Page 1
From: Ira Fader
To: Small, Elliot
Date: 5/4/04 12:17PM
Subject: Re: Health Insurance percentages
Elliot — There's nothing unlawful about what you are suggesting. When the Legislature amended c. 3213,
sec 16 to require a minimum 10% employee contribution to the HMO premium share, the "uniformity'
requirement for HMO premiums among municipal employees went out the window. So, even if all the
other unions in town have agreed to a 70 -10 split on HMO premiums, the teachers are free to hold out for
something better, including what you've suggested, which is the old "equal dollar" idea that used to be in
the law but isn't anymore. At the going rate for PPOs, an equal dollar agreement will probably drop the
employee HMO contribution way down. Maybe even close to 90 -10. If you can successfully get equal
dollars for the HMO when everyone else has taken 70 -10 across the board, more power to youl
Any Qs, give me a call
Ira
>>> Elliot Small 5/4/2004 11:14:25 AM >>>
The Town of Mansfield currently pays 80% of premiums for their PPO and a higher percentage for their
HMO. The Town has just negotiated with most of the municipal unions to change to a 70% Employer
payment for all plans. There is no indemnity plan offered. Is there anything that legally prevents the
Teachers from negotiating a 70% Employer payment on the PPO, but a higher percentage for the
HMO - -for example applying the same dollar amount paid for the PPO to the HMO, which would result in a
lower employee %payment on the HMO.
Unfortunately I need to know very soon.
CC: Clarke, Ann; Paes, Alice
M
MANSFIELD PUBLIC SCHOOLS °Attainment of Excellence"
School Committee
Emil Giordano, Chairman John A. Moretti
Michael Trowbridge, Vice Chairman Superintendent of Schools
Jean Miller Lincoln D. Lynch III
Steven Greenberg Assistant to Superintendent for Business
Jeffrey Sankey
To: John A. Moretti
Superintendent of Schools
From: Lincoln D. Lynch
Assistant to Superintendent for Business
Date: May 4, 2004
RE: Teacher Negotiations
Health Insurance Split
Spoke to Mike Long. He made the following observations:
• If MTA has a written opinion that states one bargaining unit can agree to a split regardless of what all the
unions do — get it in writing from Elliot. Mike does not agree. (I called Elliot for a copy.)
• There was a case in Brockton where the teachers had a better deal than the other units.
• MGL C.32B, Section 7A is very clear.
• The other bargaining units will object to any independent deals and we'll have a problem on our hands.
• Elliot responded that if we could go with the 70/30 split on the PPO and apply that
same dollar amount to the HMO — we could get a deal.
OTHER:
Mike Sams and Steve McCaffrey requested a copy of the Johnson Controls lease contract through Mary Lou at
John D'Agostino's office. I told her that the issue was off the table. If they wanted a copy they could call you for it.
2 Park Row — Mansfield, Massachusetts 02048 — llynch @mansfieldschools.com — Tel: (508) 261 -7500 — Fax: (508) 261 -7547
Town of Mansfield
Executive Session of Selectmen, Finance Committee and School Committee
May 4, 2004
Presiding: Selectmen Chairman Mike McCue
Present: Members of the Board of Selectmen, Finance Committee, School Conunittee, Jolm
Moretti, John D'Agostino and Bea Kearney
Chairman McCue called the meeting to order at 7:35 p.m.
On a motion that was duly made and seconded, it was
VOTED (unanimous voice vote) to convene an executive session to discuss contract negotiations.
Moretti discussed matters related to the health care split and his support for the movement to a 70/30
split and that future increases also be split 70/30. Further discussed a contingency clause within the
contract that causes all other provisions of the contract to survive even if all bargaining units do not
ratify. Discussed the potential jeopardy in both leaving this provision in and taking it out.
John D'Agostino indicated that the firefighters have not yet agreed to the 70/30 split. He indicated
that circumstance could cause him to declare an impasse. If the health care split is not achieved it will
increase the budget deficit by approximately $ 416,000.
A discussion took place on the merits of withdrawing the contingency clause. There was general
support and agreement that withdrawing the contingency clause was risky but presented the best
chance of being ratified.
It was noted that contract negotiations are not likely to be concluded before Town Meeting (May 18,
2004). The budget will be presented noting that it includes assumptions regarding a positive outcome
from these contract negotiations. A July 1, 2004 target date was established to resolve this matter.
Chairman McCue thanked all in attendance for their work in these matters
On a motion that was duly made and seconded, it was
VOTED (unanimous voice vote) to conclude the executive session at 8:05pm.
Resp ctfiilly submitte
1
J` ck oldberg,
Fin a Conmr ill
ee, secretary
I plan to be out of the office on Thursday and Friday. Please contact Bea Kearney and
Richard Boucher regarding the enclosed spreadsheet.
JOD /eo
Cc: Board of Selectmen
Finance Committee
TADaily Cor pondence\Health Cue Insurance Savings.doc
Insurance Cost at Straight 70130 with Dental With 11.9% Increase Beginning July 1, 2004
Health
Premium
Town
Employee
Employee
Emp Wkly
Increase Emp Mo
Increase
Monthly
Share
Share
Share Wk
07/01/04 Wkly;;,
Now
Mo.
Bfus Care Elect PPO
At 70130 split
Old Split
t
\ dY
1,190.27
833.19
357.08
89.27
65.73
23.54
262.92
94.16 '.
Individual
478.79
335.15
143.64
35.91
26.77
'.9.14
107.08
36.56
t Blue
,Family
975.30
682.71
292.59
73.15
44.57
128.58
178.28
114.31
Individual
372.25
260.57
111.67
27.92
16.67
11.26
66.68
44.99
HMO Blue Value Plus
Family
926.55
646.59
277.97
69.49
42.34
27.15.
169.36
108.61
Individual
353.63
247.54
106.09
26.52
16.12
10.40
64.46
41.61
Retiree (Over 65)
Monthly
Increase
'Medex 3
302.53
226.90
75,63
71.10
4.53
'Manage Blue
284.63
213.47
71.16
67.29
3.87
Carve Out A
553.10
414.82
138.27
127.82
10.45
Carve Out B
766.63
574.97
191.66
191.65
0.01
Carve Out & B
320.63
240.47
80.16
80.16
(0.00)
Premium
Town
Employee
Employee
Town Mo
Decrease
Monthly
Share
Share
Share Wk
Now
Blue Care Elect PPO
At 70130 split
Plus 11.9 °h
# in Plan
Savings
Family
1,190.27
833.19
357.08
89.27
927.35
(94.16)
82
(1,721.25)
Individual
478.79
335.15
143.64
35.91
371.72
(36.57)
42
(1,535.92)
(9, 257.17)
HMO Blue
illy
975.30
682.71
292.59
73.15
797,02
(114.31)
363
(41,495.03)
iidual
372.25
260,57
111.67
27.92
304,37
(43.80)
186
(0,146.32)
(49,641.35)
HMO Blue value Plus
Family
926.55
648.59
277.97
69.49
757.19
(108.60)
0
0.00
Individual
353.63
247.54
106.09
26.52
289.15
(41.61)
0
0.00
0.00
Retiree (Over 65)
Monthly
Decrease
'Medex3
302.53
226.90
75.63
231.43
(4.53)
30
(135.98)
'Manage Blue
284.63
213,47
71.16
217.34
(3,07)
128
(495.04)
Carve Out A
553.10
414.82
138.27
425.28
(10.46)
0
0.00
Carve Out
766.63
574.97
191.66
574.98
(0.01)
1
(0.01)
Carve Out A & B
320.63
240.47
80.16
240,47
0.00
1
0.00
(631.02)
Total Annual
Savings
(714,354.57)
Delta Dental (highest rate)
50150
Annual Premium
Family 445
94.10
47.05
47.05
251,247.00
Individual 387
31.79
15.90
15.90
73,816.38
Net Savings
(389,291.19)
Insurance Cost at Straight 70130 with Dental with 11.9% increase Beginning July 1, 2005 Projected
Health
Health & Dental
Premium
Town
Employee
Employee
Emp Wk
Increase Emp Mo
Increase Weekly Increase to Employee
Monthly
Share
Share
Share Wk
7/1/05 Wkly :
Now
Mo.
28%
Blue Care Elect PPO
At 70130 split
Old Split old split
Hith+
Tax Net 50K
Dent
Advtg Add.
1,331.92
932.34
399.58
99.89
74.59
26.30
298.36
101.22 72.35
20.26 52.09 10.0175
,y
Individual
535.77
375.04
160.73
40.18
30.33
59.85
121.32
39.41 25.75
7.21 18.54 ': 0.0068
Blue
Family
1,091.36
763.95
327.41
81.85
51.83
30.02
207.32
120.09 77.07
21.58 55.49 :0.0208
Individual
416.55
291.59
124.97
31.24
19.74
11.50
78.96
46.01 27.40
7.67 19.73 0.0079
HMO Blue Value Pius
Family
1,036.81
725.77
311.04
77.76
49.23
25.53
196.92
114.12 75.68
21.16 54.42 ? 0.0197
Individual
395.72
277.00
118.72
29.68
18.75
10.93
75.00
43.72 26.82
7.51 19.31 0.0076
Retiree (Over 65)
Monthly
Increase
'Medex 3
329.16
246.87
82.29
77.76
4.53
`Manage Blue
309.68
23226
77.42
73.56
3.86
Carve Out A
618.92
464.19
154.73
144.28
10.45
Carve Out B
857.86
643.40
214.47
214.46
0.00
Carve Out & B
358.79
269.09
89.70
89.70
(0.00)
Premium
Town
Employee
Employee
Town Mo
Decrease
Monthly
Share
Share
Share Wk
7/1105
Blue Care Elect PPO
At 70/30 split
Old Split
# In Plan
Savings
Family
1,331.92
932.34
399.58
99.89
1,033.56
(101.22)
82
(8,29971)
Individual
535.77
375.04
160.73
40.18
414.45
(39.41)
42
(1,655.26)
(9,954.97)
HMO Blue
ily
1,091.36
763.95
327.41
81.85
884.04
(120.09)
363
(43, 591 "4)
ddual
416.55
291.59
124.97
31.24
337.59
(46.01)
186
(8,556.93)
(52,140.07)
HMO Blue Value Plus
Family
1,036.81
725.77
311.04
77.76
839.89
(114.12)
0
0.00
Individual
395.72
277.00
118.72
29.68
320.72
(43.72)
0
0.00
0.00
Retiree (Over 65)
Monthly
Decrease
'Madex3
329.16
246.87
82.29
251.40
(4.53)
30
(135.00)
'Manage Blue
309.68
232.26
77.42
236.12
(3.86)
128
(494.08)
Carve Out
618.92
464.19
154.73
474.64
(10.45)
0
0.00
Carve Out B
857.86
643.40
214.47
643.40
(0.00)
1
(0.00)
Carve Out A & B
358.79
269.09
8910
269.09
0.00
1
0.00
(020.90)
Total Annual
Savings
(752,805.97)
Delta Dental (highest rate)
50/50
Annual Premium
Family 445
94.10
47.05
47.05
251,247.00
Individual 387
31.79
15.90
15.90
73,816.38
Net Savings
(427,742.59)
Insurance Cost at Straight 70130 with Dental with 11.9% Increase Beginning July 1, 2006 Projected
Health
Health &Dental
Premium
Town Employee
Employee
Emp Wk Increase Emp Mo
Increase Weekly Increase to Employee
Monthly
Share
Share
Share Wk
7 /1106 Wkly
Now
Mo.
Hlth+
280A _
Tax Net 60K
31ue care Elect PPO
At 70/30 split
Old Split old. split
Dent
Advtg Add
I
1,490.42
1,043.29
447.13
111.78
Increase
84.50
27.28.
338.00
109.13 74.33
20.81
7.66
53.52 0.0189
0.0079
\ y
ndividual
66329
464.30
198.99
49.75
38.30
11.45
153.20
45.79 27.34
19.69
`Blue
-
Family
1,221.24
854.87
366.37
91.59
59.95
31.64
239.80
126.57 78.69
48.48 28.01
22.03 56.66 0.0219
9.84 20,17 0.0084
Individual
466.12
326.28
139.84
34.96,
22.84
12.12
91.36
HMO Blue Value Plus
Family
1,160.19
812.13
348.06
87.01
56.94
30.07
227.76
120.30 77.12
27.41
21.59 55.53 0.0208
7.67 19.73 0.008
Individual
442.81
309.97
132.84
33.21
21.70
11.51
66.80
46.04
Retiree (Over 65)
Monthly Increase
`Medex 3
358.13
268.60
89.53
85.01
4.52
`Manage Blue
336.94
252.71
84.24
80.38
3.86
Carve Out A
692.58
519.44
173.15
162.70
10.45
Carve Out B
959.95
719.96
239.99
239.96
0.03
Carve Out A & B
401.49
301.12
100.37
100.38
(0.01)
Premium
Town
Employee
Employee
Town Mo
Decrease
Monthly
Share
Share
Share Wk
Now
Blue Care Elect PPO
At 70130 split
# in Plan
Savings
Family
1,490.42
1,043.29
447.13
111.78
1,152.42
(109.13)
82
42
(8,948.33)
(1,923.05)
Individual
663.29
464.30
198.99
49.75
510.09
(45.79)
(10,871.39)
HMO Blue
wily
1,221.24
854.87
366.37
91.59
981.44
(126.57)
363
(45,945.84)
466.12
326.28
139.84
34.96
374.76
( °18.48)
186
.vidual
(54,982.17)
HMO Blue Value Pius
Family
1,160.19
812.13
348.06
87.01
932.43
(120.30)
0
0.00
Individual
442,81
309.97
132.84
33.21
356.01
(48.04)
0
0.00
Retiree (over 65)
Monthly
Decrease
'Medex3
358.13
268.60
89.53
273.12
256.56
(4.52)
(3.88)
30
128
(135.88)
(493.44)
`Manage Blue
336.94
252.71
519.44
84.24
173.15
529.88
(10.44)
0
0.00
Carve Out
Carve Out B
692.58
959.95
719.96
239.99
719.99
(0.03)
1
(0.03)
Carve Out A & B
401 A9
301.12
100.37
301.11
0.01
1
(629.04)
Total Annual
Savings
(797, 552.32)
Delta Dental (highest rate)
50150
Annual Premium
Family
445 94.10
47.05
47.05
251,247.00
Individual
387 31.79
15.90
15.90
73,816.38
Net Savings
(472,488.94)