City Takes First Step in Healthcare Change

February 22, 2012
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Senior members of Mayor Carlo DeMaria Jr.’s administration and panel representing the City’s labor unions met recently to open discussions redesigning the City’s healthcare coverage for employees.  The City Council adopted legislation giving the Mayor authority to initiate discussions with a panel of union representatives on the redesign and if approved the Mayor will send the plan to the State Department of Administration and Finance for review.

The City estimates to save as much as $1.7 million dollars in health care costs per year through restructuring the costs shared between the city and the employees. The State Legislation does not allow cities and towns to enter the state’s Group Insurance Commission (GIC) if the savings meets a 5% savings threshold.  The Mayor’s Healthcare consultants, Cook and Company, estimate the City will not reach the 5% threshold, meaning the city will have to redesign their current healthcare coverage plans. While the City does not have the option to enter into the state’s Group Insurance Commission (GIC) the Mayor’s office presented a comparable option to the Unions, which increased co-payments and some deductibles.

“As I had mentioned last year a major benefit of the program is that the legislation calls for a percentage of the total savings to go back to the employees,” states Mayor Carlo DeMaria,  “while we are looking to decrease our healthcare costs, we are not expecting employees to carry the entire load, we are excited about the opportunity to work together on this new plan.”

Under the new option, the City can open a 30-day negotiation period with the Insurance Panel, once the new plan is approved by the State Department of Administration and Finance the City will give the Unions a 60-day notice of implementation.

The Mayor expects the city to save close to $1.7 Million dollars this year alone, if all the proposed changes are accepted, with a large percent of the savings going back to the employees.  The Municipal Healthcare relief law requires the City to return a portion of the savings to the employees in exchange for adopting the newly designed plan.