Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Retiree Health topic
No spam. Unsubscribe anytime.
Board approves new premium-based retiree health plan, cites roughly $1.3 million in savings
Summary
The Board of Selectmen approved replacing the town retiree health plan with a premium-based plan administered through Health Insurance Services (Anthem/Express Scripts), which the finance director said would reduce projected annual medical costs from about $1.8 million to about $810,000 and cut prescription spending, with an estimated total savings of about $1.3 million. The plan takes effect July 1.
The Board of Selectmen on Feb. 25 approved an agreement to replace the town’s retiree health plan with a premium-based plan administered through Health Insurance Services (Anthem/Express Scripts), a change the finance director said will take effect July 1 and reduce the town’s projected medical costs.
“Terry Connor, finance director, said the town covers about 178 retirees and that the new plan changes Medicare to the primary payer and the town plan to a supplemental role, which reduces costs for both the town and many retirees,” Connor said in his presentation. “Our current medical costs are about $1,800,000 and under this proposal they’ll drop to about $810,000,” Connor added, while noting prescription spending would also fall and the total estimated savings are about $1.3 million.
The proposal, presented by Connor and developed with Health Insurance Services and outside consultants, converts the town’s existing frozen retiree tiers into a single premium-based group plan. Connor said the package includes Anthem network coverage with Express Scripts for prescriptions, travel insurance for retirees who travel abroad, and health-club membership benefits.
Board members asked how the change affects retirees who are frozen at longstanding rates, whether higher-earning retirees would face Medicare surcharges, and whether a Medicare Advantage-style carrier could later eliminate coverage. Connor said the town and its consultants factored those issues into the design, that the plan would be administered as a group plan so individuals could not be dropped from coverage for reasons such as ZIP code, and that the town would work with retirees to ensure no one pays more than they currently do.
Connor described additional benefits for active employees, who will be able to elect into the new plan when it opens to them, and said the town’s OPEB liability is expected to decline because the plan will be locked in at a lower rate. He said the contract will include mutual termination language and that the town’s legal department will review final contract terms before implementation.
The board asked for public meetings and one-on-one sessions during the transition window; Connor said enrollment support and phone assistance will be provided and that the implementation timeline gives staff a little over four months to complete outreach and enrollment. After discussion, the board moved, seconded and approved the item by voice vote.
The board’s formal action directs staff to finalize the contract with the recommended vendor, prepare outreach materials for retirees and employees, and proceed with a July 1 implementation date pending final legal review.
