Massachusetts Municipal Health Reform Legislation of 2011
Changes to MGL Chapter 32B
On July 12, 2011, Governor Duval Patrick signed An Act Relative to Municipal Health Insurance which amends Massachusetts General Laws Chapter 32B. Ch 32B provides for contributory group, general or blanket insurance for persons in the service of counties, cities, town and districts, and their dependents.
The major features of the new legislation are:
• Chapter 32B has new Sections 21-23 which remove the requirement to follow the Ch. 150E bargaining process and/or the Ch. 32B, Section 19 process, if adopted, for making certain benefit changes. The allowed benefit changes are those that bring the plan to the co-pay and deductible levels of the GIC’s “Benchmark Plan”. There’s an active employee benchmark plan and a Medicare benchmark plan. The legislation also allows the governmental unit to transfer subscribers to the GIC without following the requirements of Section 19(e).
• Sections 18 and 18A, which were local option sections, have been replaced with a New Section 18A which is mandatory. All governmental units are now required to transfer Medicare eligible retirees and their dependents out of “active” plans and into Medicare supplement plans or Medicare Advantage plans.
• Joint Purchase Groups now have the authority to make plan design changes to the level of the GIC’s “Benchmark Plan”; however, the participating governmental units are then required to follow the process of Ch. 32B, Section 21 (a local option expedited coalition-type bargaining process with arbitration) to adopt those new plan design changes.
• There’s a new process for joining the GIC. In order to make a proposal to join the GIC, the governmental unit must demonstrate that it can save at least 5% more by joining the GIC than by making the plan design changes allowed under Ch. 32B, Sections 21 and 22. The employer must following the process described in Section 21.
What it means for town employees and retirees:
The new law is designed to make it easier for towns to shift some of the financial burden of health care coverage for town employees and retirees from the taxpayers to the employees. Employees and retirees can expect their health care costs to increase. The law requires that all Massachusetts Municipalities do an actuarial assessment of their health care cost and compare it to benchmark plans provided by the Group Insurance Commission (GIC). The purpose is to discover the maximum possible savings if the town offered insurance under the GIC benchmark plan.
If the town can demonstrate that it can save at least 5% more by joining the GIC, then this is one option the town can propose. However, the town is a participant in the Scantic Valley Regional Health Trust (SVRHT), a joint purchasing group for health insurance, which has been well managed and is finanically sound. It is more likely that the Town of Wilbraham will follow the process provided under the new law and include employees, union and retiree representatives, in making changes to plan design (such as increases to co-pays and plan deductibles) to bring cost within the prescribed benchmark.
For retirees the new law means that they are required to enroll in Medicare if they are eligible, and select a Medicare supplement or Medicare Advantage plan from those the town offers. Retirees who turn 65 or are over 65, or disabled, must provide the town with written verification of their eligibility or ineligibility for Medicare.
Retirees can request this information by calling the Social Security Administration at (866) 964-5061
Social Security Administration
Regional Office
70 Bond Street
Springfield, Massachusetts 01104
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