HomeMy Public PortalAbout06-10-2014 Group Insurance Commission_201406110954305988Michael J. Driscoll
Town Manager
TOWN OF
WATERTOWN
Office of the Town Manager
Administration Building
149 Main Street
Watertown, MA 02472
Phone: 617-972-6465
Fax: 617-972-6404
www.watertown-ma.gov
townmgrewatertown-ma.gov
To: Honorable Town Council
From: Michael J. Driscoll, Town Manager
Date: May 30, 2014
RE: Group Insurance Commission
As you know, the Town was one of 11 Massachusetts communities joining the
Commonwealth of Massachusetts Group Insurance Commission in Fiscal Year 2010. A
Memorandum of Agreement was executed with the Public Employee Committee transferring the
Town's group health insurance coverage to the Group Insurance Commission beginning July 1,
2009 and continuing through June 30, 2015.
Pursuant to the provisions of the Memorandum of Agreement, the Town and the Public
Employee Committee entered into negotiations in February 2014 for a successor to the 2009-
2015 agreement.
I am pleased to inform you that the Town has reached an agreement with the various member
groups of the Public Employee Committee on the attached Memorandum of Agreement
continuing the Town's group health coverage under the Group Insurance Commission through
June 30, 2021.
This decision allows the Town to continue providing quality health insurance to its employees
and retirees. Additionally, the Town has been the beneficiary of the Group Insurance
Commission's proven track record of cost containment and stability, as evidenced in the attached
chart. The Fiscal Year 2015 appropriation of $13,954,440 for "Insurance & Employee Benefits"
is only $600,727 higher than the Fiscal Year 2009 appropriation of $13,353,713, some six fiscal
years ago and is a 4.50% increase over that time period or an average of .75% for each of six
fiscal years. This track record will continue to greatly assist in the development of future
budgets, while striving to provide the highest level of essential services to the citizens of
Watertown while utilizing the taxpayers' dollars as effectively as possible.
cc: Honorable School Committee William N. Brownsberger, State Senator
Honorable Library Board of Trustees Jonathan Hecht, State Representative
All Department Heads John J. Lawn, Jr., State Representative
MEMORANDUM OF AGREEMENT
BETWEEN
THE TOWN OF' WATERTOWN
AND
THE WATERTOWN PUBLIC EMPLOYEE COMMITTEE
WHEREAS, the Town of Watertown, through its Town Manager, ("Town") and the duly -
formed Watertown Public Employee Committee ("PEC') have been engaged in negotiations on health
insurance benefits to be provided by the Town to employees, retirees and their dependents and
survivors;
WHEREAS, the Watertown Town Council voted on September 30, 2008 to accept Section 19
of Chapter 32B for the purpose of transferring the Town's group health insurance coverage to the
Group Insurance Commission ("GIC") contingent upon the Town negotiating a written agreement with
the PEC and the successful transfer of subscribers to the GIC,
WHEREAS, the Town and the PEC negotiated for such transfer and ultimately reached an
agreement on same that is effective July 1, 2009 through June 30, 2015;
WHEREAS, the Town and the PEC entered into negotiations in February and March 2014 for
a successor to their 2009 — 2015 agreement and have now reached an agreement on same;
NOW, THEREFORE, the Town and the PEC agree as follows:
Effective Date and Duration of Agreement
1. The Town's acceptance of G.L. c. 32B, §I9 and this Agreement are expressly conditioned
upon the GIC's acceptance of this Agreement and the continuation of coverage of the Town's
subscribers under the GIC. Assuming all conditions are satisfied, this Agreement
shall take effect on July 1, 2015 and shall remain in effect through June 30, 2021.
Continuation of Health Coverage under Me GIC
2. The Town will continue coverage of subscribers through the GIC through June 30, 2021. For
purposes of this Agreement, the term "subscribers" shall mean all employees, retirees,
surviving spouses and dependents, currently eligible for and receiving health insurance
through the Town and any employees, retirees, surviving spouses and dependents who
become eligible for and receive health insurance through the Town in the future.
3. The Town will provide notice to the GIC of the Town's continuation of subscribers' coverage
under the GIC by sending a copy of this Agreement to the GIC as soon as possible after the
Town and the PEC execute the Agreement.
4. The Town will take all reasonable and necessary actions required by the G1C to effectuate the
continuation of subscribers' coverage as of July I, 2015 and to maintain coverage thereafter
for the duration of this Agreement.
Contribution Splits
HMO Plans - 80/20 Split
5. For the duration of this Agreement, the Town will contribute eighty percent (80%) of the
premium or cost for any health maintenance (HMO) plans offered by the GIC and the
subscriber shall contribute twenty percent (20%). Such plans currently include:
• Neighborhood Health Plan (NHP Care)
• Fallon Select Care
• Fallon Direct Care
• Fallon Senior Plan
• Health New England
• Health New England MedPlus
• Tufts Health Plan Medicare Complement
• Tufts Health Plan Medicare Preferred
• Harvard Pilgrim Primary Choice
• Tufts Health Plan Spirit
If the GIC offers any new or additional HMO plans during the life of this Agreement, the
same contribution rate shall apply.
PPO Plans - 80/20 Split
6. For the duration of this Agreement, the Town will contribute eighty percent (80%) of the
premium or cost for any preferred provider (PPO) plans offered by the GIC and the subscriber
shall contribute twenty percent (20%). Such plans currently include:
• Harvard Pilgrim Health Care Independence
• Tufts Health Plan Navigator
• UniCare State Indemnity Plan Plus
• UniCare State Indemnity Plan Community Choice
If the GIC offers any new or additional PPO plans during the life of this Agreement, the same
contribution rate shall apply.
Indemnity Plans -60/40 Split
7. For the duration of this Agreement, the Town will contribute sixty percent (60%) of the
premium or cost for any indemnity plans offered by the GIC and the subscriber shall
contribute forty percent (40%). Such plans currently include:
• UniCare State Indemnity Plan / Basic with CIC
• UniCare State Indemnity Plan / Basic without CIC
• UniCare State Indemnity Plan / Medicare Extension (OME) with CIC
• UniCare State Indemnity Plan / Medicare Extension (OME) without CIC
• Harvard Pilgrim Medicare Enhance
If the GIC offers any new or additional indemnity plans during the life of this Agreement, the
same contribution rate shall apply.
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Medicare Enrollment - 60/40/Split
8. Subscribers who are eligible or who become eligible for Medicare shall transfer to Medicare
coverage. The Town shall pay any Medicare Part B premium penalty assessed by the federal
government and will contribute sixty percent (60%) of the base, i.e. lowest, monthly cost of
the Medicare Part B enrollment premium for any subscriber enrolled in Medicare and the
subscriber will contribute the remaining premium amount. On a quarterly basis, the Town
shall send payment of its share of the current month base Medicare Part B premium to the
home address on file for any Medicare eligible subscriber. The subscriber shall notify the
Town of any changes to his or her address during the life of the Agreement.
9. The Town will contribute ninety percent (90%) of the premium or cost of any plan (non -
Medicare or Medicare extension plan) selected by any subscriber who prior to July 1, 2009
was enrolled in health insurance through the GIC pursuant to Section 12 of Chapter 32A
(RMT subscriber) and the RMT subscriber will contribute ten percent (10%). For any RMT
subscriber who is currently enrolled in Medicare or who becomes eligible for Medicare, the
Town will contribute sixty percent (60%) of the Medicare Part B and the subscriber will
contribute forty percent (40%) to Medicare Part B. The Town will pay the Medicare Part B
premium penalty assessed by the federal government for any RMT subscriber, if any.
Hiatus Period
10. Premium Payments by Employer During Hiatus Period
New employees are eligible to enroll in the GIC within 10 calendar days of the first date of
employment. GIC benefits begin on the first day of the month following sixty (60) days or
two (2) full calendar months of employment, whichever is less. This period between the date
of employment and the effective date of coverage is hereinafter referred to as the "Hiatus
Period." During the Hiatus Period, the Town shall pay a stipend to the newly hired subscriber
that is equal to the percentage split referenced in this Agreement of the total cost of the
premium for the plan in which the employee has enrolled.
GIC Retroactive Date of Coverage
Ha subscriber incurs a medical expense(s) during the Hiatus Period that in sum exceeds the
full -cost health insurance premium of the GIC selected plan for the Hiatus, the subscriber may
file a written request to the Commission for approval of Health Coverage to become effective
on the first day of employment. Upon approval by the Commission, coverage shall take effect
as of the first day of employment. in this event, the Town shall contribute its share of the
selected GIC plan premium retroactive to the first day of employment as provided for under
the Agreement. The Town shall submit the full -cost health insurance premium for the Hiatus
Period to the GIC in a timely manner. The employee shall reimburse the Town his/her
proportional share of the premium and any stipend amount already received for the Hiatus
Period through normal payroll deductions.
Flexible Spending Accounts
12. The Town shall continue providing a Flexible Spending Medical Program (i.e. "Section 125"
plans such as Pretax Insurance Premium Payments, Dependent Care Account Plan "DCAP"
and Medical Care Account Plan "MEDCAP") and shall provide for and pay any one-time set
up costs to implement the program. The Town shall pay any annual administrative fee for
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subscribers who opt into the program for the duration of this Agreement. The program shall
include a voluntary debit card system. Employees may set aside funds up to the maximum
amount permitted by the Internal Revenue Code.
Life/Dental Insurance
13. The Town shall offer life insurance and dental insurance to subscribers at the same terms as
were provided to group insurance participants prior to transfer to the GIC.
Future Meetings of Town and PEC
14. The PEC shall be composed of a union representative from each collective bargaining unit
which negotiates with the Town and a retiree representative designated by the Retired State,
County and Municipal Employees Association. Each union representative and the retiree
representative shall have the option of allowing one additional representative to attend
meetings of the PEC and the Town Manager or his designee. Any employee who is a
representative on the PEC shall receive time off to attend meetings of the Committee with the
Town with full pay and benefits,
15. The parties shall establish a regular schedule of meetings to discuss the implementation of this
Agreement and any issues relating to the effectiveness and efficiency of health coverage for
subscribers. Such meetings shall take place quarterly, unless agreed otherwise. Meetings will
be held at times and places which are mutually agreed upon by the Town Manager and the
PEC. In addition, either party may convene a meeting upon seven days' notice to the other
party, unless there is an emergency that requires shorter notice. Meeting notices will be
provided to the Town Manager and to the PEC in writing. The Town Manager may provide
notice of a meeting or a series of meetings up to twelve months in advance of meeting.
Correspondence and Information
16. The Town shall make available to the PEC copies of any correspondence between the Town
and the GIC or between the Town and any provider of health care.
Health Coverage After June 30, 2021
17. The transfer of subscribers to the GIC will terminate on June 30, 2021 unless, pursuant to a
successor agreement executed by the parties, notice is provided to the GIC no later than
October 1, 2020, that the Town will continue to provide health coverage for subscribers
through the GIC effective July 1, 2021.
18. The Town and the PEC shall begin successor negotiations for a successor agreement between
January 2, 2020, and February 28, 2020. During this period, either the Town or the PEC may
give written notice to the other of their desire to withdraw from the GIC. If either the Town
or the PEC desires to withdraw from GIC coverage, the Town shall present a proposal for
alternative plans which are substantially similar with respect to the premiums, co -payments,
deductibles, and benefits of those offered by the GIC for the 2019-20 plan year so that the
parties may fully explore and negotiate the health coverage to be provided to subscribers
starting on July 1, 2021. Notification under this section shall be accomplished by the Town
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Manager's delivery of said written proposal to the PEC Chair and the PEC's delivery of a
written proposal to the Town Manager. By mutual agreement of the parties coverage under
the GIC may be withdrawn.
19. In the event that the parties agree to withdraw from GIC coverage, contribution percentages
shall remain as set forth in paragraphs 5 (HMO plans), 6 (PPO plans), 7 (Indemnity plans), 8
(Medicare Part B) and 9 (RMTs) of this Agreement and the Town will provide alternative
plans which are substantially similar with respect to the premiums, co -payments, deductibles
and benefits to those offered by the GIC for the 2019-2020 plan year. The Town will revoke
acceptance of G.L. c.32B, §19 and the parties will return to bargaining health insurance
pursuant to G.L. c. 150E. In the absence of any agreement pursuant to G.L. c.150E, the
provisions of this paragraph concerning contributions and alternative plans will remain in
effect.
20. If the Town and PEC are unable to reach a successor agreement by May 31, 2020 or if there is
a dispute concerning the alternative plans proposed by the Town, impasse may be declared by
either the Town or the PEC. Either the Town or the PEC may file a demand for final and
binding arbitration of any unresolved issues including, but not limited to, whether to withdraw
from GIC coverage or continue in the GIC; whether the alternative plans proposed by the
Town are substantially similar with respect tot he premiums, co -payments, deductibles, and
benefits to those offered by the GIC for the 2019-2020 plan year, and premium contribution
percentages; provided, however, that in the event that the arbitrator orders withdrawal from
GIC coverage, contribution percentages shall remain as set forth in paragraphs 5 (HMO
plans), 6 (PPO plans), 7 (Indemnity plans), 8 (Medicare Part B) and 9 (RMTs) of this
Agreement.
21. The arbitration proceeding shall be administered by the American Arbitration Association
under the procedures set forth in its Labor Arbitration Rules. The Town and the PEC shall
each bear their own costs for proceeding to arbitration and the Town and the PEC shall share
equally in the cost of the arbitrator's services. Any employee who is designated to participate
in the arbitration proceeding by the PEC shall be granted time off with full pay and benefits to
participate in the arbitration. The arbitrator shall render a decision no later than September 1,
2020. The arbitrator's determination shall be final and binding on the parties. In the event
that maintaining coverage was agreed to by the parties and was not among the issues
submitted to the arbitrator or the arbitrator's award orders the parties to maintain coverage
under the GIC, the parties shall execute a successor agreement in conformity with the award
no later than September 25, 2020.
22. In the event that withdrawing from the GIC was agreed to by the parties and was not among
the issues submitted to the arbitrator or the arbitrator's award orders the parties to withdraw
from the GIC, the health insurance coverage agreed to by the parties or ordered by the
arbitrator, together with the contribution percentages set forth in paragraphs 5 (HMO plans), 6
(PPO plans), 7 (Indemnity plans), 8 (Medicare Part B) and 9 (RMTs) shall remain in effect for
subscribers until replaced by an agreement pursuant to G.L. c.150E.
23. The Town will notify the GIC no later than October 1, 2020, either that subscribers will
continue coverage through the GIC effective July 1, 2021 for the interval specified in the
Agreement, or that the Town is withdrawing its subscribers effective July 1, 2021.
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Effect of Agreement
24. This Agreement shall be binding on all subscribers and shall supersede any conflicting
provisions of any Town policies or any collective bargaining agreements between the Town
and any unions representing Town employees.
Cancellation
25. In the event the Town is delinquent in making payments as required by the GIC and the GIC
notifies the Town that it intends to exercise its option to cancel coverage pursuant to Section
19, the Town will immediately notify the PEC, present it a proposal for plans which are at
least the actuarial equivalent of those offered by the GIC, and engage in negotiations with the
PEC for replacement coverage.
Arbitration of Disputes
26. Either party may submit a dispute between the parties concerning the interpretation or
application of this Agreement to the American Arbitration Association for final and binding
arbitration under its Labor Arbitration Rules. A request for arbitration by the PEC must be
approved by seventy percent (70%) of the weighted votes of the representatives on the PEC.
A request for arbitration by the Town must be approved by the Town Manager. The cost of
the arbitration shall be borne equally by the parties.
Savings Clause
27. If any provision or portion of the Agreement is found to be unenforceable or unlawful, the
remaining provisions or portions shall remain binding.
Scope & Modification
28. This Agreement shall constitute the whole of the Agreement between the Town and the PEC.
The Agreement may be modified only by a writing signed by the Town and the PEC.
Authorization to Sign Agreement
29. Each signatory to this Agreement is authorized to bind the entity he/she represents. The PEC
represents that it has the authorization and approval of seventy percent (70%) of the weighted
votes of the PEC and that this Agreement is binding on all subscribers and their
representatives.
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c
ehalf of the Town of Watertown:
Micba l riscoll, Town Manager Date
PUBLIC EMPLOYEE COMMITTEE
Domenic Arone Retirees
Keith Parent, Patrolmen s Association
William Gildea, Jr.,
International Association of Fire Fighters, Local 1347
Debra King, Watertow ducators Assn, Units A,B,C
Patricia Powers, atertown Educators Assn, Unit D Da e
�Aa �� y
Date
_/Oh
Date
SlaPirW
Date
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Date
Wayne acLe►d,, Custodians/food ervtce, SEIU, Local 888
�eu ebauer, Teams" rs, Local 25
Madeli le Lynch, Town Ha
Assp hates, SEIU, Local 888
Nicholas d pas,
WPS Educational Clerical Employees, SEIU 888
Kay Westcott, Library Local 2436, AFSCME, Council 93
in Hanrahan, Po ice Supervis Association, Local 373
494015v.4131406/0144
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Date
/424V__
4
D to
Date
Da e
Date
7
FISC AL YEAR 2015 BUDGET PRESENT ATION SUMMARY (PART 3)
R EVENUE:
TAXES
STATE AID
LOCAL RECEIPTS
OTHER FINANCING SOURCES
TOTAL REV ENUE
EXPENDITURES:
EDUCATION A PPROPRIA TION
EDUCATION 1 TIM E CURRICULUM
EDUCATION SUB TOTAL
TOWN DEPTS. APPROPRIATIONS
WASTE DISPOSAL
SNOW & ICE
STATE ASSESSMENTS
PENSION COSTS
INSURANCE & EM PLY. BENEFITS
DEBT AND INT EREST
CAPiTA L PROJECTS
OTHER FINANCING USES
TOWN COUNCIL RESERVE
GOVERNOR'S M ID YEAR 9C CUT
TOTA L EXPENDITURES
PROJECTED SURPLUS/(DEFICIT)
FINAL
FY 2009
BUDGET
MANAGER"S
PROPOSED
FY 2015
VARIA NCE
FY 15
TO F Y09
VARIA NCE
% FY 15
TO FY 09
AVERAGE
A NN UAL %
INC. OR DEC.
$ 66,633,934
69.63 %
$ 85,649,424
75.56 %
$ 19,015,490
28 .54%
4.76%
$ 12,929,784
13.51%
$ 11,441,279
10 .09 %
$ (1,488,505)
-11 .51%
-1.92%
$ 10,728,827
11.21%
$ 9,335,470
8.24%
$ (1,393,357)
-12.99 %
-2 .16 %
$ 5,400,486
5.64%
$ 6,923,827
6.11%
$ 1,523,341
28 .21 %
4.70 %
$ 95,693,031
100%
$ 113,350,000
100 %
$ 17,656,969
18 .45%
$ 31,846,000
33 .28%
$ 38,942,000
34.36%
$ 7,096,000
22.28%
3 .71%
$ -
0 .00%
$ 750,000
0 .66%
$ 750,000
$ 31,846,000
33.28%
$ 39,692,000
35 .02%
$ 7,846,000
24.64%
4.11%
$ 27,526,586
28 /7%
$ 29,418,742
25.95 %
$ 1,892,156
6.87 %
t15 %
$ 3,117,793
3.26%
$ 3,008,335
2 .65%
$ (109,458)
-3.51%
-0 .59%
$ 1,756,001
1.84%
$ 1,165,000
t03%
$ (591,001)
-33.66%
-5 .61%
$ 2,087,290
2.18%
$ 2,413,680
2 .13 %
$ 326,390
15.64%
2 .61 %
$ 7,325,580
7. 66%
$ 12,309,391
10.86%
$ 4,983,811
68.03 %
11.34%
$ 13,353,713
13.95%
$ 13,954,440
12 .31 %
$ 600,727
4.50 %
0.75 %
$ 6,345,007
6.63%
$ 7,408,928
6.54%
$ 1,063,921
16 .77%
2.79%
$ 1,220,638
1.28%
$ 1,501,253
1.32 %
$ 280 ,615
22 .99%
3.83%
$ 316,500
0.33%
$ 428,231
0.38%
$ 111,731
35.30%
5.88%
$ 23,362
0. 02%
$ 2,050,000
1 .81%
$ 2,026,638
$ 774,561
0.81%
$ -
0 .00%
$ (774,561)
$ 95,693,031
100%
$ 113,350,000
100%
$ 17,656,969
18.45 %
$ -
$ (0)
$ (0)
13