Budget Amendment ID: FY2012-S3-74
LOC 74
Municipal Health Care Reform III
Mr. Tolman moved that the proposed new text be amended by striking section 51 and inserting the follow: -
SECTION 51. Said chapter 32B is hereby further amended by adding the following 8 sections:-
Section 21. As used in this section and sections 22 to 24, inclusive, the word “savings” shall, unless the context clearly requires otherwise, mean the difference between the total projected premium costs for health insurance benefits provided by a political subdivision with changes to health insurance benefits that may be authorized under sections 22 or 23 for the first fiscal year of such changes and the total projected premium costs for health insurance benefits provided by a political subdivision for the same fiscal year without such changes.
(a) Any political subdivision electing to change health insurance benefits under sections 22 or 23 shall do so in the following manner: in a county, except Worcester county, by a vote of the county commissioners; in a city having Plan D or a Plan E charter, by majority vote of the city council and approval by the manager; in any other city, by majority vote of the city council and approval by the mayor; in a town, by vote of the board of selectmen; in a regional school district, by vote of the regional district school committee; and in all other districts, by vote of the registered voters of the district at a district meeting.
(b) Prior to implementing any changes authorized under sections 22 or 23, the appropriate public authority shall give notice to its public employee committee of its intention to enter into negotiations to implement changes to its health insurance benefits under this section. If a public employee committee has not been established under section 19, a public employee committee shall be established exclusively to negotiate changes under this section, section 22 and section 23, and shall be established in the same form and with the same per cent votes as prescribed in the fifth paragraph of subsection (a) of said section 19.
The notice shall detail the proposed changes, the appropriate public authority’s estimate of its anticipated savings of such changes and a proposal to mitigate, moderate or cap the impact of these changes for subscribers, including retirees, low-income subscribers and subscribers with high out-of-pocket health care costs, who would otherwise be disproportionately affected.
(c) The bargaining shall be conducted in good faith and completed no later than 30 days from the point at which the public authority first gives notice. If after 30 days the appropriate public authority and public employee committee are unable to enter into a written agreement to implement changes under section 22 or 23, the matter shall be submitted to a municipal health insurance review panel. The panel shall be comprised of 3 members, 1 of whom shall be appointed by the public employee committee, 1 of whom shall be appointed by the public authority and 1 of whom shall be selected through the secretary of administration and finance who shall forward to the appropriate public authority and the public employee committee a list of 3 impartial potential members, each of whom shall have professional experience in dispute mediation and municipal finance or municipal health benefits, from which the appropriate public authority and the public employee committee may jointly select the third member; provided, however, that if the appropriate public authority and the public employee committee cannot agree within 3 business days upon which person to select as the third member of the panel, the secretary of administration and finance shall select the final member of the panel. Any fee or compensation provided to a member for service on the panel shall be shared equally between the public employee committee and the appropriate public authority.
(d) The municipal health insurance review panel shall approve the appropriate public authority’s immediate implementation of the proposed changes under section 22 or 23; provided, that any increased dollar amounts for co-payments, deductibles, tiered provider network co-payments and other plan design features proposed for a non-medicare plan under section 22 do not exceed the median plan design features offered by the commission for a non-medicare plan under section 4 of chapter 32A; and provided further, that any increased dollar amounts for co-payments, deductibles, tiered provider network co-payments and other plan design features proposed for a medicare-extension plan under section 22 do not exceed the median plan design features offered by the commission for a medicare-extension plan under section 10C of chapter 32A.
(e) Within 10 days of receiving proposed changes under sections 22 or 23, the municipal health insurance review panel shall:
(1) confirm the appropriate public authority’s estimated monetary savings due to proposed changes under section 22 or 23; and
(2) review the proposal to mitigate, moderate, or cap the impact of these changes for subscribers, including retirees, low-income subscribers and subscribers with high out-of-pocket health care costs, who would otherwise be disproportionately affected. The municipal health insurance review panel may determine the proposal to be insufficient and may require additional savings to be shared with subscribers in the form of premium reductions, health reimbursement arrangements, wellness programs, health care trust funds for emergency medical care or inpatient hospital care, out-of-pocket caps, Medicare Part B reimbursements or reimbursements for other qualified medical expenses, as determined by the panel. In no case shall the municipal health insurance review panel designate more than 33 per cent of the savings to subscribers. In reaching a decision on the proposal under this subsection, the municipal health insurance review panel may consider an alternative proposal from the public employee committee to mitigate, moderate, or cap the impact of these changes for subscribers, 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 municipal health insurance review panel’s decision shall be binding upon the parties.
(f) The secretary of administration and finance, in consultation with the secretary of labor and workforce development, shall adopt regulations to carry out this section.
Section 22. (a) Upon meeting the requirements of section 21, an 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 may increase, as part of the non-medicare health plans that it offers to its subscribers, co-payments, deductibles, tiered provider network co-payments and other plan design features to a level no greater in dollar amount than the median co-payments, deductibles, tiered provider network co-payments and other plan design features of non-medicare plans offered by the commission under section 4 of chapter 32A; and may increase, as part of the medicare-extension health plans that it offers to its subscribers, co-payments, deductibles, tiered provider network co-payments and other plan design features to a level no greater in dollar amount than the median co-payments, deductibles, tiered provider network co-payments and other plan design features of medicare-extension plans offered by the commission under section 10C of chapter 32A . A public authority shall meet the requirements of section 21 each time an increase is made to co-payments, deductibles, tiered provider network co-payments and other plan design features under this section.
(b) Nothing in this section shall prohibit an appropriate public authority from including in the political subdivision’s health plans higher co-payments, deductibles or tiered provider network co-payments or other plan design features than those authorized by subsection (a); provided, however, that such higher co-payments, deductibles, tiered provider network co-payments and other plan design features may be included only after the political subdivision has satisfied any bargaining obligations under chapter 150E.
(c) Except as provided for in subsection (b), the decision to implement changes under this section shall not be subject to bargaining under chapter 150E or section 19.
(d) Nothing in this section shall relieve a political subdivision from providing health insurance coverage to a subscriber to whom it has an obligation to provide coverage under this chapter.
Section 23. (a) Upon meeting the requirements of section 21, an appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers may elect to provide health insurance coverage to its subscribers by transferring its subscribers to the commission. The commission shall issue rules and regulations consistent with this section related to the process by which subscribers shall be transferred to the commission. Nothing in this section shall be construed to change eligibility standards for health insurance as set forth in the definition of “employee” in section 2. Nothing in this section shall be construed to preclude an appropriate public authority from reaching an agreement under subsection (e) of section 19.
(b) The decision to accept this section shall not be subject to bargaining under section 19 or chapter 150E.
(c) Nothing in this section shall relieve a political subdivision from providing health insurance coverage to a subscriber to whom it has an obligation to provide coverage under this chapter.
(d) An appropriate public authority, which has elected to transfer its subscribers under this section to the commission, shall notify the commission of such transfer. The notice shall be provided to the commission by the appropriate public authority on or before December 1 of each year and the transfer of subscribers to the commission shall take effect on the following July 1. On the effective date of the transfer, the health insurance of all subscribers, including elderly governmental retirees previously governed by section 10B of chapter 32A and retired municipal teachers previously governed by section 12 of chapter 32A, shall be provided through the commission for all purposes and governed under this section. As of the effective date and for the duration of this transfer, subscribers transferred to the commission's health insurance coverage shall receive group health insurance benefits determined exclusively by the commission and the coverage shall not be subject to collective bargaining, except for contribution ratios.
Subscribers transferred to the commission who are eligible or become eligible for Medicare coverage shall transfer to Medicare coverage, as prescribed by the commission. In the event of transfer to Medicare, the political subdivision shall pay any Medicare part B premium penalty assessed by the federal government on retirees, spouses and dependents as a result of enrollment in Medicare part B at the time of transfer into the Medicare health benefits supplement plan. For each subscriber's premium and the political subdivision's share of that premium, the subscriber and the appropriate public authority shall furnish to the commission, in such form and content as the commission shall prescribe, all information the commission deems necessary to maintain subscribers' and covered dependents' health insurance coverage. The appropriate public authority of the political subdivision shall perform such administrative functions and process such information as the commission deems necessary to maintain those subscribers' health insurance coverage including, but not limited to, family and personnel status changes, and shall report all changes monthly to the commission. In the event that a political subdivision transfers subscribers to the commission under this section, subscribers may be withdrawn from commission coverage at 3 or 6 year intervals from the date of transfer of subscribers to the commission, subject to terms governing the withdrawal interval and withdrawal procedures in a written agreement between the appropriate public authority and the collective bargaining units pursuant to this chapter and chapter 150E.
The appropriate public authority shall decide and provide notice to the commission of any withdrawal by October 1 of the year prior to the effective date of withdrawal. All withdrawals shall be effective on July 1 following the political subdivision's notice to the commission. Except as otherwise provided in a written agreement between the appropriate public authority and the public employee committee, withdrawal from commission coverage shall revoke acceptance of this section and any written agreements related to the implementation of this section as of the effective date of withdrawal.
The political subdivision shall abide by all commission requirements for effectuating such withdrawal, including the notice requirements in this subsection. In the event a political subdivision withdraws from commission coverage under this section, such withdrawal shall be binding on all subscribers, including those subscribers who, prior to the transfer to the commission, received coverage from the commission under sections 10B and 12 of chapter 32A and, after withdrawal from the commission, those subscribers who received coverage from the commission under said sections 10B and 12 of said chapter 32A shall not pay more than 25 per cent of the cost of their health insurance premiums. In the event of withdrawal from the commission, the political subdivision and public employee unions shall return to governance of negotiations of health insurance under chapter 150E and this chapter.
(e) To the extent authorized under chapter 32A, the commission shall provide group coverage of subscribers' health claims incurred after transfer to the commission. The claim experience of those subscribers shall be maintained by the commission in a single pool and combined with the claim experience of all covered state employees and retirees and their covered dependents, including those subscribers who previously received coverage under sections 10B and 12 of chapter 32A.
A political subdivision that self-insures its group health insurance plan under section 3A and has a deficit in its claims trust fund at the time of transferring its subscribers to the commission and the deficit is attributable to a failure to accrue claims which had been incurred but not paid may capitalize the deficit and amortize the amount over 10 fiscal years in 10 equal amounts, or on a schedule providing for a more rapid amortization. Except as otherwise provided in this section, subscribers eligible for health insurance coverage under this section shall be subject to all of the commission regulations, terms, conditions, schedule of benefits and health insurance carriers as employees and dependents. The commission shall, exclusively and not subject to collective bargaining under chapter 150E, determine all matters relating to subscribers' group health insurance rights, responsibilities, costs and payments, including, but not limited to, the manner and method of payment, schedule of benefits, eligibility requirements and choice of health insurance carriers, but shall not determine contribution ratios and obligations. The commission may issue rules and regulations consistent with this section and shall provide public notice of any proposed rules and regulations; provided, however, that if an interested party requests the opportunity to comment, such party shall be given an opportunity to review those rules and regulations and comment, in writing, and at a public hearing; provided, further that for the purposes of this section the commission shall not be subject to chapter 30A.The commission shall negotiate and purchase health insurance coverage for subscribers transferred under this section and shall promulgate regulations, policies and procedures for coverage of the transferred subscribers. The schedule of benefits available to transferred subscribers shall be determined by the commission under chapter 32A. The commission shall offer those subscribers the same choice as to health insurance carriers and benefits as those provided to state employees and retirees. The political subdivision's contribution to the cost of health insurance coverage for transferred subscribers shall be as determined under this section, and shall not be subject to the provisions on contributions in said chapter 32A. Any change to the premium contribution ratios shall become effective on July 1 of each year, with notice to the commission of such change not later than January 15 of the same year.
A political subdivision that transfers subscribers to the commission shall pay the commission for all costs of its subscribers' coverage, including administrative expenses and the governmental unit's cost of subscribers' premium. The commission shall determine on a periodic basis the amount of premium which the political subdivision shall pay to the commission. If the political subdivision unit fails to pay all or a portion of these costs according to the timetable determined by the commission, the commission may inform the state treasurer who shall issue a warrant in the manner provided by section 20 of chapter 59 requiring the respective political subdivision to pay into the treasury of the commonwealth as prescribed by the commission the amount of the premium and administrative expenses attributable to the political subdivision. The state treasurer shall recoup any past due costs from the political subdivision's cherry sheet under section 20A of chapter 58 and transfer that money to the commission. If a governmental unit fails to pay to the commission the costs of coverage for more than 90 days and the cherry sheet provides an inadequate source of payment, the commission may, at its discretion, cancel the coverage of subscribers of the political subdivision. If the cancellation of coverage is for nonpayment, the political subdivision shall provide all subscribers health insurance coverage under plans which are the actuarial equivalent of plans offered by the commission in the preceding year until there is an agreement with the public employee committee providing for replacement coverage.
The commission may charge the political subdivision an administrative fee, which shall not be more than 1 per cent of the cost of total premiums for the political subdivision, to be determined by the commission which shall be considered as part of the cost of coverage to determine the contributions of the political subdivision and its employees to the cost of health insurance coverage by the commission.
(f) If there is a withdrawal from the commission under this section, all retirees, their spouses and dependents insured or eligible to be insured by the political subdivision, if enrolled in Medicare part A at no cost to the retiree, spouse or dependents, shall be required to be insured by a Medicare extension plan offered by the political subdivision under section 11C or section 16. A retiree shall provide the political subdivision, in such form as the political subdivision shall prescribe, such information as is necessary to transfer to a Medicare extension plan. If a retiree does not submit the information required, the retiree shall no longer be eligible for the retiree’s existing health insurance coverage. The political subdivision may from time to time request from a retiree, a retiree's spouse and dependents, proof certified by the federal government of the retiree’s eligibility or ineligibility for Medicare part A and part B coverage. The political subdivision shall pay the Medicare part B premium penalty assessed by the federal government on those retirees, spouses and dependents as a result of enrollment in Medicare part B at the time of transfer into the Medicare health benefits supplement plan.
Section 24. Notwithstanding any other provision of this chapter, the appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers by acceptance of section 22 or section 23 shall provide health care flexible spending accounts to allow certain subscribers, as determined by the appropriate public authority, to set aside a portion of earnings to pay for qualified expenses. Qualified medical expenses may include, but shall not be limited to, out-of-pocket costs such as inpatient and outpatient co-payments, calendar year deductibles, office visit co-payments and prescription drug co-payments.
Section 25. Notwithstanding any other provision of this chapter, the appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers under this chapter 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 co-payments, calendar year deductibles, office visit co-payments and prescription drug co-payments.
Section 26. An appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers under this chapter shall conduct an enrollment audit not less than once every 2 years. The audit shall be completed in order to ensure that members are appropriately eligible for coverage.
Section 27. An insurance carrier, third party purchasing group oradministrator or the commission in the case of a governmental unit, which has undertaken to provide health insurance coverage to its subscribers by acceptance of sections 19 or 23, shall, upon written request, provide the governmental unit and/or the public employee committee with its historical claims data within 45 days of such request.
Section 28. Each fiscal year, the commission shall prepare and place on its website a report delineating the median co-payments, deductibles, tiered provider network co-payments and other plan design features offered by the commission in non-medicare plans under section 4 of chapter 32A and median co-payments, deductibles, tiered provider network co-payments and other plan design features offered by the commission in medicare-extension plans under section 10C of chapter 32A.