Health insurance pact faces scrutiny

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May 22--Questions continued swirling this week over a municipal union group's pre-Town Meeting rejection of a low-cost health insurance option that could have saved taxpayers anywhere from $400,000 to $1 million.

The Board of Selectmen on Monday night voted unanimously to order Town Manager Reginald "Buzz" Stapczynski to approach the group's 14 union leaders and one retiree representative about reconsidering their April 29 decision to stay with their more expensive health carrier -- Blue Cross/Blue Shield -- rather than switch to a cheaper, but equivalent, option from Tufts.

"They had two options," said Selectman Mary O'Donoghue, referring to the municipal union group. "They could stay with (Blue Cross/BlueShield), which increased premiums by 2 percent, or go with Tufts, which reduced premiums by 3.5 percent.

"It was a delta of 5.5 percent, which would have resulted in a savings of $900,000."

Just a couple days before a May 1 deadline and less than a week before Town Meeting, the Public Employees Committee, or PEC, voted to continue with the Blue Cross/Blue Shield plan offered by the Mass. Interlocal Insurance Agency, or MIIA. It is a plan that town workers have had for years and which many felt more comfortable with, despite the savings to both taxpayers and employees.

During Town Meeting, the unions' decision to select the more expensive plan was decried by speakers who said it showed a disregard for taxpayers, who pay their salaries and benefits.

The first night of Town Meeting, resident Bob Landry proposed an amendment to cut the health insurance budget by $680,000, or roughly the amount taxpayers would have saved if employees had gone with the Tufts plan. The amendment failed by just nine votes.

Selectmen now want the town manager to go back to the unions, reopen negotiations and try to achieve the savings that eluded the town late last month. But it is unclear if the process can even be reversed, since paperwork has been filed with MIIA and town employees are already choosing benefit options.

Whether the unions decide to reopen negotiations now or reconsider their options next year, one thing remains certain: The entire process is mired in controversy, with questions about the process and other issues, including whether the town manager should have recused himself from negotiations.

Delayed notice

In fact, selectmen on Monday night saved most of their criticism for the town manager, saying they had not been kept abreast of negotiations with the unions and didn't know until the last minute the union group was even considering two health plans.

Selectmen said the first time they knew that the Tufts plan was even being considered, much less that it could save the town hundreds of thousands of dollars, was on Monday, April 28, during a presentation by the town's health insurance consultant, Ken Lombardi.

Lombardi alerted selectmen that the employees' group was about to vote on a plan to meet a May 1 deadline set by the MIIA.

"It's concerning," Selectman Alex Vispoli said this week. "That night we heard about it for the first time. And it was extremely disappointing to me that we had to find out in the newspaper" that the unions had decided on April 29 to go with the higher-cost option.

"The Board of Selectmen had no recourse," Vispoli added. "This was a fault in the way it played out. It was very disappointing and frustrating for all involved. I'd hope there is an opportunity to go back to renegotiate a new plan."

Stapczynski said this week that he was disappointed, too, noting that he had presented the unions with both options weeks before the May 1 deadline, but that they delayed taking a position until just a few days before the deadline.

"I spent weeks with this group," he said. "I expected them to reject the Tufts proposal on April 11."

That admission caused an uproar among selectmen Monday night, with Vispoli lashing out, "If you knew it was going to be rejected, why didn't you tell us? There was no conversation. No opportunity to have that conversation."

Selectman Brian Major, in an effort to quell criticism of Stapczynski, noted, "it's a learning moment." He urged the board to send the health carriers a message that the town wants lower premiums in the future.

"This sends a message to the carriers that the community is serious about savings," he said.

O'Donoghue agreed, but went a step further. She asked the town manager why he didn't negotiate with PEC to go for the lower cost.

"Why wouldn't you go for Tufts or go back to MIIA to say, 'If you want this contract, we need to talk turkey,'" she said.

Conflict of interest?

Newly elected selectmen Chairman Dan Kowalski said on Tuesday that some questions are being raised about Stapczynski's performance during the negotiation process with the PEC group.

Stapczynski sits on the board of directors of MIIA, the group that offered the higher-cost Blue Cross/Blue Shield plan.

MIIA is a quasi-public organization affiliated with the Massachusetts Municipal Association that offers a variety of insurance products to 300 cities, towns and other municipal organizations like regional school and water districts across the state.

Stapczynski said he has been involved with MIIA for 15 years and now sits on its board of directors. He also serves on MIIA's health benefits trust and the organization's reinsurance company.

While the town manager gets no compensation from MIIA, the fact that he is on the board was enough to prompt him last year to file a letter with the Board of Selectmen disclosing that there was a potential for a conflict of interest.

"According to the state Ethics Commission, that covers me for appearance of conflict of interest," Stapczynski said recently.

While he did negotiate with the union group, he said, "I don't sign any agreements that have to do with MIIA."

The president of the firefighters union, Eric Teichert, said he was curious why Stapczynski didn't press harder for the Tufts plan, knowing it would save the town so much money.

Stapczynski said that he tried to remain neutral during the negotiations.

"I had to be even-handed," he said.

Kowalski, however, said it might have been a good idea for the town manager to delegate the negotiating responsibilities to someone else.

"I recall he filed a disclosure about his involvement in that organization, so we were put on notice that he's on the board and that there was a disclosure of potential conflict of interest," Kowalski said. "But just disclosing he is affiliated with that organization doesn't absolve you of any conflicts of interest. You need to handle every situation that could lead to a conflict of interest conservatively and not put yourself into a position of conflict of interest.

"I would like to have seen the situation handled differently. He could have delegated the entire task to someone else, but he chose a different approach."

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