Amendment #749 to H3400
Municipal Health Insurance
[Sponsors] Mr. Walsh of Boston, and Representatives O’Day of West Boylston, Provost of Somerville, Smizik of Brookline, Stanley of Waltham, Chan of Quincy, Murphy of Weymouth, Alicea of Charlton, Cantwell of Marshfield, Fresolo of Worcester, Turner of Dennis, Garry of Dracut, Andrews of Orange, Lewis of Winchester, Sullivan of Fall River, Dwyer of Woburn, Creedon of Brockton, Canavan of Brockton, Sciortino of Medford, Spiliotis of Peabody, Collins of Boston, Smith of Everett, Atsalis of Barnstable, Wolf of Cambridge, Ashe of Longmeadow, Nyman of Hanover, Brady of Brockton, Fallon of Malden, Fennell of Lynn, Mark of Hancock, Cabral of New Bedford, Coppinger of Boston, Rogers of Norwood, Henriquez of Boston, Swan of Springfield, Ehrlich of Marblehead, Mahoney of Worcester, Finn of West Springfield, Garlick of Needham, Miceli of Wilmington, Coakley-Rivera of Springfield, Toomey of Cambridge, Garballey of Arlington, McMurtry of Dedham, Devers of Lawrence, Koczera of New Bedford, Calter of Kingston, Balser of Newton, and Khan of Newton move that the bill be amended by striking out section 46 and inserting in place thereof the following seven sections:-
Section 46: Section 19(a) of Chapter 32B is hereby amended by striking out the first and third sentences of paragraphs 1, paragraph 2, paragraph 4 and the second sentence of paragraph 5 and inserting in place of the first sentence of paragraph 1 the following:
Notwithstanding any other provision of this chapter, after July 1, 2011, the appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers by acceptance of any other section of this chapter shall provide health insurance coverage to all its subscribers pursuant to this section by entering into contracts with health insurance carriers.
Section 46A: Paragraph (e) of Section 19 of Chapter 32B, as amended by sections 2 and 2A of chapter 377 of the acts of 2008, is further amended by striking the second sentence and inserting in place thereof the following two sentences:
For any political subdivision that transfers its subscribers to the commission under subsection (e), notice shall be provided to the commission by the appropriate public authority not later than December 1 of each year and the transfer of subscribers to the commission shall take effect on the following July 1.
Section 46B: Section 19 of Chapter 32B is hereby amended by striking the last paragraph in subsection (e).
Section 46C: Section 2 of chapter 32B of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting after subsection (f) the following subsection:-
(f½) “Health Reimbursement Account”, a federally-recognized tax-exempt health benefit program that allows an employer to reimburse qualified medical expenses paid by subscribers.
Section 46D: Said section 19 of said chapter 32B, as so appearing, is hereby amended by adding the following subsection (j):-
( j) (1) Given the severe fiscal crisis facing the commonwealth and municipalities, this section shall allow municipalities to achieve cost savings on municipal group health insurance provided pursuant to G.L. c. 32B.
(2) The secretary of administration and finance shall promulgate regulations requiring the group insurance commission to submit to the secretary the actuarial value of a) the non-medicare plan provided by the commission which has the largest subscriber enrollment at the start of the fiscal year beginning fiscal year 2012 through fiscal 2014 which shall be the group insurance commission non-medicare actuarial benchmark, and b) the actuarial value of the medicare extension plan provided by the commission which has the largest subscriber enrollment at the start of the fiscal year beginning fiscal year 2012 through fiscal 2014 which shall be the group insurance commission medicare extension actuarial benchmark.
(3) Notwithstanding any special or general law to the contrary, after July 1, 2011, a political subdivision may, in order to achieve reductions in health care expenditures, elect to engage in a one time process through coalition bargaining pursuant to section 19. Municipalities shall notify each exclusive bargaining representative of the determination that it desires to engage in this process to reduce health insurance costs. The municipality shall convene a meeting of its appropriate authority and the public employee committee under the provisions of subsection (a) of section 19.
(4) The appropriate authority and the public employee committee shall negotiate a section 19 agreement which shall determine whether to transfer subscribers to the group insurance commission or how the plan or plans will be modified to reduce the actuarial value of its health care plan or plans, provided however, that the actuarial value of the negotiated plan or plans shall be no lesser than the group insurance commission actuarial benchmark or the group insurance commission medicare extension actuarial benchmark.
(5) The parties shall negotiate over how the resulting cost savings shall be shared. Cost savings for purposes of this subsection shall mean the decrease in the political subdivision’s share of the total premium costs for the fiscal year beginning July 1, 2011 Not less than one fourth of the cost savings shall be returned to the political subdivision’s general operating budget; provided, further that not less than one fourth of the cost savings realized shall be returned to the subscribers in the form of: premium reductions, premium contributions paid by the political subdivision, health reimbursement accounts, wellness programs, health care trust funds for emergency medical care or inpatient hospital care, Medicare Part B reimbursements or other qualified medical expenses, as determined through negotiation.
(6) If the appropriate public authority and public employee committee have not reached an agreement within 45 days after their first meeting, any unresolved issues shall be submitted to an arbitrator with expertise in municipal health benefits selected by the parties under the rules of the American Arbitration Association.
The form of arbitration shall be last best offer, issue by issue. The arbitrator shall have the power to administer oaths and to require by subpoena the attendance and testimony of witnesses, production of books, records and other evidence relative to or pertinent to the issues. The cost of arbitration shall be shared equally by the appropriate public authority and the public employee committee. Any person acting as an arbitrator under this section, shall not be required by any administrative, arbitration or non-criminal judicial tribunal to disclose any files, records, documents, notes or other papers or be required to testify with regard to any information obtained while functioning as an arbitrator under this subsection.
The arbitrator shall issue a decision not later than 45 days after the unresolved issues are submitted to the arbitrator. In reaching a decision, the arbitrator shall decide any issues concerning the section 19 agreement not resolved by the parties, including how the remaining cost savings shall be shared, which shall include savings for the political subdivision and for subscribers. In reaching a decision, the arbitrator shall consider the political subdivision’s ability to pay, existing premium contribution ratios between the appropriate authority and the subscribers, intended use of savings by the political subdivision, any historical negotiations or concessions by retirees on benefits, and the historical negotiations on benefits and salary including total compensation and all other evidence.
The arbitrator’s decision, if supported by material and substantive evidence on the whole record shall be, binding upon the parties, unless the decision of the arbitrator is rejected by the legislative branch of the municipality by a two-thirds vote within 30 days. If the political subdivision rejects the decision of the arbitrator, the political subdivision shall not implement any changes authorized under paragraph (4).
(7) Any such agreement reached pursuant to this subsection shall remain in effect through June 30, 2014 and the parties shall then negotiate a successor agreement regarding subscribers’ group health insurance pursuant to section 19.
Section 46E: Chapter 32B is hereby amended by adding the following section:-
Section 21. Notwithstanding any other provisions of this chapter or Chapter 32A, a political subdivision which transfers its subscribers to the commission, reduces the actuarial value of the health care plans under subsection (j) of section 19, may provide health reimbursement accounts to reimburse subscribers for qualified medical expenses. Qualified medical expenses may include, but shall not be limited to, out-of-pocket costs such as inpatient and outpatient copayments, calendar year deductibles, office visit copayments and prescription drug copayments.
Section 46F:. Section 8 of Chapter 32A is hereby amended by striking out paragraphs 1 and 2 and substituting the following:
Section 8. For policies of group life insurance and accidental death and dismemberment insurance, and group health insurance purchased by the commission in accordance with the provisions of sections four, five and ten C, and for self-insured health coverage provided by the commission in accordance with the provisions of section 4A, the commonwealth, on behalf of active and retired employees and their dependents, shall contribute no less than seventy-five per cent of the total monthly premium or rate applicable to said coverages and the active and retired employees on behalf of themselves or themselves and their dependents shall contribute the remaining twenty-five per cent of the total monthly premium or rate, except, that upon approval by way of an annual appropriation act, the commonwealth may contribute more than seventy-five per cent but less than the entire total monthly premium or rate. The annual appropriation act shall provide the necessary annual sum to be funded by the commonwealth based upon the estimated monthly cost as required by sections four and four A and the estimated monthly cost for coverages contained in other sections of this chapter and shall describe the ratio of contribution to be paid by the commonwealth and by the active and retired employees insured under sections of this chapter. The adoption of the annual appropriation act establishing the annual contribution ratios for active and retired employees and their dependents shall be deemed to establish and to have established a contractual relationship under which employees, retirees and their dependents are entitled to contractual rights and benefits, including the coverage and benefits provided, the contribution ratios established in the annual appropriation act, the schedule of co-pays and deductibles and other terms upon which the total premium cost of each plan and the contribution ratios established in the annual appropriation act were based, and, notwithstanding the provisions of chapter twenty-nine, no amendments or alterations shall be made that will deprive any employee or retiree of their rights and benefits thereunder, including municipal subscribers, during the fiscal year covered by the annual appropriation act.
With respect to any period of insurance authorized by this chapter which is in effect for an active employee and dependent, there shall be withheld from each payment of salary or wages no more than twenty-five per cent of the aforesaid total monthly premium or rate, or, there shall be a lesser amount as provided in the annual appropriation act. With respect to any period of insurance authorized by this chapter which is in effect for a retired employee and dependent, there shall be withheld from each payment of pension or retirement allowance no more than twenty-five per cent of the aforesaid total monthly premium, or, there shall be withheld a lesser amount as provided in the annual appropriation act. The commonwealth shall contribute a share of any additional premium which may be required for coverage of an employee’s dependent child who is nineteen years of age or over and mentally or physically incapable of earning his own living, such share equaling the same ratio as that paid on behalf of an active or retired employee and dependent