Insurance resolution sparks backlash

METHUEN — As the cost of health insurance increases the chair of the city’s Public Employment Committee (PEC) said they are willing to negotiate, but it needs to be transparent.

Methuen Education Association co-president and PEC Chair Kara Blatt on Monday told the City Council she had been blindsided by an emergency measure proposed by Mayor D.J. Beauregard to explore other insurance options, including the state’s Group Insurance Commission (GIC), through a process that puts some restrictions on union bargaining.

This budget season, officials are facing tough decisions as costs continue to rise, including in insurance, and state and federal aid not expected to make up the difference.

The PEC negotiates insurance on behalf of the city’s unions.

However, after a Thursday meeting with city officials Blatt struck a more positive tone Friday calling that day’s negotiations “a good start,” though still somewhat wary.

She said the move by Beauregard came after the unions had sent three separate demands to bargain over insurance without getting a formal meeting until recently.

Councilors tabled the resolution after a discussion Monday with many voicing sympathy for employees. Beauregard was absent from the meeting due to a personal matter.

Blatt said the city has about 900 active insured employees and roughly 900 retirees. This fiscal year group health insurance costs make up about $17.5 million of the city’s $336 million budget, according to the city’s financial transparency dashboard.

Blatt praised Beauregard for his work in the district, but said the unions have been concerned over recent “cost shifting measures.

“He has done a lot for the schools, this is more of we need to get back to sitting down and talking,” she said.

Blatt cited a $45 monthly increase to retirees plans as well as other changes in January after retirees were only given two months notice.

City Solicitor Paul O’Neill said on Monday the resolution does not require a change of insurance, but instead provides the city additional options to address the skyrocketing cost of healthcare. However, he said after the council’s vote on the measure the body will not have a role in negotiating insurance.

Regardless of their vote, O’Neill said there will also need to be changes to insurance due to rising costs.

“We are over budget, we are over claims,” he said.

The resolution, which accepts a piece of state law, does not circumvent collective bargaining either, but lays out steps for the city to develop a proposal and bring it to the PEC, O’Neill said.

After the proposal the union and city would have 30 days to come to an agreement before the decision is put before a third party.

O’Neill said there is a time constraint since in order to join the GIC by January the city needs to give notice to the state by June 30. He said the city is required to return 25% of cost savings if it happens to “lessen the blow.”

While historically most municipalities not in the GIC have had little interest in joining the commission, rising costs have pushed at least 13 other communities into debating making the switch this year, O’Neill said.

One benefit of the GIC was that when the insurance fund runs into a deficit the state would pay the bill, rather than local taxpayers. He said that GIC goes into a deficit every other year.

However, the union wouldn’t be able to negotiate over the insurance plan, since it is chosen by the GIC. The unions would still be able to bargain with how costs are split with the city though.

In recent years the city’s insurance fund has also run into a deficit. While insurance costs are rising everywhere Blatt said other communities in the same situations have avoided deficits.

“Self-insured cities need to be able to weather good and bad years, unfortunately Methuen is not able to weather that anymore,” she said.

O’Neill said he didn’t have the exact figures, but recent deficits have been in the realm of $500,000 or more a year.

Last year, the city was forced to shuffle millions of dollars around due to a $4.4 million shortfall in the insurance fund, largely stemming from weight loss drugs.

Councilor Mike Simard said he is a union advocate, but the city was obligated to at least explore cost saving measures.

Councilor Ryan DiZoglio, who works in a school district in another community that is part of the GIC, said he will be voting against the resolution until he knows there will be some benefit to union members.

“I think it’s really important that we remember the human aspect of this,” Councilor Ella MacLaren said. “We are talking about the quality of care for people who are integral to our city.”

MacLaren tabled the motion.

Blatt said both the union and city explored joining the GIC last year, but both decided against it.

She said her organization has also filed an unfair labor practice after the city sent a survey regarding insurance to members without the union’s consent.

“Unilaterally discussing things with our members is not OK,” Blatt said Monday.

Blatt emphasized the scope of who would be affected by an insurance change, including police, fire and Department of Public Works employees.

“Everybody in the city is part of this insurance,” she said. “We all bargained our contracts based on benefits and this is a huge benefit and cost to all employees.”

Any change would be particularly impactful for lower paid staff, like paraprofessionals and cafeteria workers.

Last fiscal year, Blatt said employee insurance benefits totaled roughly $25,000 per employee.

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