Methuen, unions approve changes in insurance plan changes [The Eagle-Tribune, North Andover, Mass.]

May 24--METHUEN -- The city and unions have agreed to a new insurance plan that could reduce the cost for the city by more than $1 million.

The plan is estimated to bring the city's insurance tab down by $1,229,509, from $11.4 million this fiscal year to about $10.2 million next year. It covers more than 1,000 municipal and school employees, whose unions negotiated with the city together.

Mayor Stephen Zanni said he supported moving all Methuen public employees into the state insurance pool, but there was resistance from some of the unions.

Methuen's public unions bargained with the city as a single Public Employees Commission. Donna Gogas, president of the Methuen Education Association, was the lead negotiator for the commission and strongly opposed the state insurance option.

The changes reduce employees' annual contributions to the PPO plan by nearly $400 per person for the family plan and about $150 for single plans, according to the city. It also added a new option that officials said is meant to mimic the state GIC plan. If an employee selected that plan, it would reduce their contribution by $925 for a family plan and $370 for a single plan.

According to the mayor's office, an existing surplus in the city's insurance pool of $1.5 million will offset deductibles by paying the first $800 of the $2,000 family plan deductible and the first $400 of the $1,000 single plan deductible.

"The health insurance has seen a remarkable turnaround from fiscal year 2010 when the city was faced with a $3 million ... deficit," Zanni wrote to the City Council Monday.

City Auditor Tom Kelly said the city's insurance is a pool of the premiums from employees that is then used to pay medical expenses through the Tufts network of doctors and providers. The city pays 62 percent of the cost of each employee's plan, and the employee pays the rest.

"We like the plan," said fire Lt. Tim Sheehy. "We're putting it to our body Thursday night. Basically it keeps us out of GIC, the city saves money and we save money. It's pretty good."

GIC is the state Group Insurance Commission plan, which covers most state employees. The Legislature last year opened the plan to municipal and school employees with the approval of the municipality. That gave government negotiators leverage for negotiating because if talks stall, the employees can be moved into the state plan.

Mike Gagliardi, business manager of Laborers International Local 175, which represents public works employees, said he thought the GIC would be a better option for employees and the city. "I think GIC offers the city, the taxpayers and the employees extraordinary adequate coverage for less," he said.

"It also offers a menu approach (for individual plan options). State employees in GIC are never complaining about their coverage."

He said GIC would mean a lower cost to the city and lower premiums for employees while easing deductibles.

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