Some Mashpee Employees, Retirees Hold Onto Costly Health Insurance Plan
By: Geoff Spillane
During this time of economic uncertainty and budget cuts, the skyrocketing cost of providing health insurance to municipal workers has become a major issue in Massachusetts, leaving some to wonder why Mashpee continues to offer an expensive indemnity health plan option.
Mashpee, through its membership in the Cape Cod Municipal Health Group, continues to offer its employees and retirees Master Health Plus, a premium Blue Cross Blue Shield plan that is by far the most expensive of the seven health insurance options made available by the town.
While there has been a general movement away from the plan in recent years, due in large part to a financial incentive program, there are currently 24 town and school employees enrolled in Master Health Plus, representing 15 family plans and nine individual plans, according to information provided by the town human resources department.
Town and school department retirees are urged to transition to Medicare programs and are mandated to switch at age 65. As many employees retire before the age of 65, there are still 20 retirees enrolled in Master Health Plus, representing nine family plans, nine individual plans, and two single parent/single child plans.
If all employees and retirees currently enrolled in Master Health Plus were to transition to another plan such as the Blue Care Elect PPO, the town estimates it would save at least $17,500 per month or $210,000 per year, according to an estimate provided by the human resources department.
The major benefit of an indemnity health plan is that members can use any doctor, anywhere, with minimum co-pays.
“It’s not a Cadillac. It’s not a Rolls-Royce. It’s the Bentley of healthcare plans,” said Dr. Mark A. Davini, member of the Mashpee Finance Committee, referring to Master Health Plus.
Master Health Plus is priced at $2,844 per month for a family plan, and $1,135 per month for an individual policy.
In comparison, on the low end of the town’s health insurance options, the Harvard Pilgrim Health EPO Rate Saver plan monthly costs are $1,397 per family and $522 for an individual.
The town pays 75 percent of the monthly insurance premium for employees and retirees.
“This is a plan I would wish on everyone, but the town just can’t afford it. Too few people are costing far too much,” added Dr. Davini, who also believes that lower cost Blue Cross Blue Shield options offered by the town are not significantly different than Master Health Plus, especially when most people prefer to use local primary care physicians.
The issue of controlling municipal health insurance costs has been a hot topic on both the state and local level recently. Just this week, the Fiscal 2012 state budget issued by the Massachusetts Senate Ways and Means Committee included a municipal health insurance reform proposal intended to provide relief for cities and towns.
Earlier this month at Mashpee Town Meeting, controversy erupted surrounding the town moderator’s enrollment in the Master Health Plus family plan.
Eliminating the Master Health Plus option, or changing the percentage of the premium an employee would pay, is not as easy as it would seem.
In offering employee health benefits, Massachusetts governmental employers are subject to the provisions of Massachusetts General Laws and the collective bargaining statute. Mashpee would have to negotiate with each of its six unions and reach agreement in order to initiate benefit or contribution changes.
There is, however, a provision that allows town management and labor to agree to coalition bargaining in which all the unions would negotiate together with the town. While this may be less time consuming, there are some downsides to this approach from the employer’s perspective, so it is not generally taken.
According to data provided to the Enterprise by the Cape’s regional municipal health insurance network there has been a significant decline in indemnity plan enrollment during the past decade. The regional network is one of the two largest municipal joint health benefit purchase groups in Massachusetts, comprising 52 governmental units on Cape Cod and Martha’s Vineyard.
In 2000, 64 percent of Barnstable and Dukes counties municipal employees were enrolled in traditional indemnity plans such as Master Health Plus. As of May 2011, only 4.5 percent of employees are enrolled in indemnity plans.
“Due to its geographical isolation, the Cape has not embraced the transition as fast as the rest of Massachusetts, which recorded rapid declines in indemnity plan enrollment in the late 1990s and early 2000s,” said Carol G. Cormier, vice president of Group Benefits Strategies, an Auburn-based consulting firm that administers benefits on behalf of Cape Cod Municipal Health Group.
One of those town employees who made the move from Master Health Plus to another plan several years ago is Town Manager Joyce M. Mason.
“I was on Master Health Plus, but realized there was another plan that would provide nearly the same benefits, but would be less costly for me and less costly for the town. I haven’t lost anything, and have never had a problem or issue while traveling,” said Ms. Mason.
The Enterprise requested the names of the town’s Master Health Plus plan participants, but was denied access to the information.
With the exception of the school department, all current non-retiree participants in the Master Health Plus plan are members of the Mashpee Fire Department.
Lieutenant Michael D. Evaul, president of the Mashpee Permanent Firefighters Local 2519, declined to comment about the matter, citing potential violation of the union’s collective bargaining rules.
“There are more and more towns trying to eliminate Master Health Plus as an option, and they are slowly but surely making progress. We tend to see people who have had the program for a long time be reluctant to change. These are typically teachers, firefighters, and those who have been advised by long-term Master Health Plus enrollees,” said A. Francis Linnell, chairman of the Cape Cod Municipal Health Group steering committee.
Ms. Mason has also seen the number of Master Health Plus enrollees in Mashpee gradually decline over the years, as the town continues to offer programs designed to educate and inform employees of other health plan options.
“There is a certain comfort level with Master Health Plus, but we encourage employees, through health fairs and other initiatives and incentives, to look at other plans that would offer just as many, or more, benefits. While, at the same time, putting a bit more back into their paychecks and saving the town some money,” said Ms. Mason.
“We also have more success when spouses are involved in the plan evaluation process,” added Ms. Mason.
Most town employee contracts from 2007 to 2010 offered a financial incentive for Master Health Plus participants to change plans. Those who changed from an indemnity plan to a non-indemnity plan received a pre-tax lump sum of $1,000 during Fiscal Year 2009, and in each year after, as long as they stayed with the non-indemnity plan.
Taxpayer discontent regarding the expensive benefit was on display at the recent Town Meeting, when resident Deirdre A. Greelish proposed eliminating the benefits provided to Town Moderator Jeremy M. Carter.
Mr. Carter is enrolled in the 75 percent town-subsidized Master Health Plus family plan, despite only overseeing two meetings per year, and receiving a mere $200 per year salary.
The proposition brought forth by Ms. Greelish was unsuccessful, as Mr. Carter is entitled to “grandfathered” benefits approved by the town Charter Commission and approved by Town Meeting several years ago. Future elected town moderators will not receive benefits.
There is a move afoot on Beacon Hill that would allow municipalities to bypass the collective bargaining process when establishing co-pays and deductibles for health benefit plans, in effect gaining local control of health plan design.
However, municipalities would still have to negotiate with unions regarding workers’ share of premiums.
Last month, the Massachusetts House of Representatives voted 111-42 to move the proposal to the Senate.
Earlier this week, the Fiscal 2012 budget released by the Senate included a proposal under which cities and towns would be able to make changes to their employee health insurance plans or join the state’s Group Insurance Commission in order to control rising costs and protect services and municipal jobs.
The reform proposal also requires all municipalities enroll eligible retirees in the Medicare program.