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School Committee votes to make health insurance switch

Date: 8/27/2015

WILBRAHAM – The Hampden-Wilbraham Regional School Committee voted unanimously at its Aug. 25 meeting to end Group Insurance Commission (GIC) coverage for retired teachers in order to switch to the Scantic Valley Regional Health Trust.

Previously, the School Committee hosted a public hearing on Aug. 18, in which more than 100 retired teachers voice their concerns regarding the change to their health insurances. At the end of the hearing, the group of retired teachers took a non-binding vote.

School Committee Chair Peter Salerno said the retired teachers voiced their concern “almost unanimously” and it was “clear that the teachers did not want this motion acted upon.”

He added the change to retiree health coverage would save the district $9.2 million during the next 20 years and establish a local control regarding how the district and retirees would pay for premium percentages.

Salerno said discussions began with the leadership of retired teachers on May 29 with a request to bargain for the issue.

However, under the law retired teachers are not allowed to bargain for a health insurance switch in this case. The ultimate decision rests with the School Committee.

In 2011, the district had $64 million in Other Post Employee Benefits (OPEB) liabilities, which has since ballooned to more than $80 million and continues to go up between $2 and $3 million annually, Salerno said. During this time, the district began exploring this issue.

He added the plan is to increase the premium costs for retirees under Scantic Valley gradually during the next 20 years, from 15 percent in 2015 to 35 percent in 2035.

“During our process of investigation, we came across a health insurance trust methodology,” Salerno said. “With the health insurance trust, once the folks are on Scantic Valley from GIC, we can negotiate with the union to determine whether or not they come down only once or we can move a number of things in negotiation.”

The plan isn’t necessarily what could come out of negotiations, he noted.  

As a result of the public hearing, the School Committee has learned that changes need to be made to the health insurance programs for coverage of individuals who live out of state, Salerno said.

“We can do that,” he added. “That’s within our control ... The other thing that is important that we learned is that some folks claimed hardship and I believe them, so what we decided to do is to establish a fund – or what we’re planning to do, nothing is decided until we negotiate – but we decided that it would be appropriate to establish a fund for those who truly are hurting. We would work with them based on what their financial status was at the time.”

School Committee member William Bontempi posed several questions to Salerno based on questions he received from constituents. He asked Salerno whether it would be possible to grandfather retirees to allow them to continue their GIC coverage.

Salerno responded by stating that this method would have “no fiscal impact” to the district.  

He added that because GIC is controlled by the state, the district would have no say if premium costs to the district increased. When the district began using GIC coverage, it was responsible for 50 percent of the premium costs. That switched to more than 85 percent at least 16 years ago.

“When it went to 85 percent, [there was] no notice to this district [and] no notice to this School Committee,” Salerno said.

Bontempi said 2,700 teachers from the district and neighboring communities and school districts are partnered with Scantic Valley. There are 130 current participants in the coverage through Scantic Valley throughout the district.

Assistant Superintendent for Business Beth Regulbuto said she is not aware of any complaints from any of the 130 people.

Salerno said the premium costs for town employees across several towns would likely increase.

The district would also host a health fair for retirees to better understand the Blue Cross Blue Shield coverage through Scantic Valley, he noted.

School Committee member Pat Gordon, who recused herself from the vote because she is a retired teacher from the district, noted after the vote that a health care fair should have taken place prior to the vote.

“That would have made the most sense,” she added. “We didn’t have to vote on it. We didn’t have to do it tonight.”

Gordon said there was a lack of side-by-side comparison of GIC’s coverage over Scantic Valley’s.

“I have not seen a booklet from Scantic Valley so we could do an analysis side by side of the plans being offered by Scantic Valley,” she added.

The public hearing was “definitely a one-sided affair,” she noted.

“The retirees, I myself, included have not had a chance to ask back and forth questions,” Gordon said.