Retiree health care hike OK’d

April 28--Emotions flared Monday at Memorial Hall where in a split 3-2 vote selectmen approved increases to retiree health insurance contributions over protests from retirees and others who urged selectmen to postpone the vote.

They said increases would break a trust with retirees while burdening those least able to afford it.

Supporters said increases were needed to tame the town's $188 million Other Post Employment Benefits (OPEB) liability, projected to grow to $650 million over 30 years, which would take away funding from police, fire, public works and school services.

They also said the increase was a first step towards solving a pressing problem long overdue for attention.

Selectmen's Chairman Mary O'Donoghue gaveled down the crowd after several spontaneous outbursts. It was a large crowd numbering more than 200.

Firefighter Union President Eric Teichert called the hike an attack on retirees, saying elderly retirees such as his mom, whose retirement is $18,000 a year, will have to pay three times what she is paying now.

Several speakers said town employees worked their whole lives with the expectation that they would pay 35 percent of their health insurance upon retirement but now that rate would climb over several years.

"Don't sell us down the river," said Peter Otis, a retired social studies teacher.

He and other retirees asked selectmen to forestall their vote until a group of retirees could sit down with them and work on a long-term solution.

'Address this now'

The OPEB discussion started with a line of current employees and retirees, members of an ad hoc group, offered to meet with selectmen to seek a longterm solution

In the meantime, the group pledged $607,000 to reduce the town's OPEB liability, the money coming from $357,000 in employee mitigation savings as well as $252,000 by moving people into a Medicare program as a good faith measure.

Others said the town had waited long enough before taking action on a long overdue problem.

"We have to address this now," said resident Ross Elkin, adding that kicking the can down the road would only compound a problem that hasn't been dealt with adequately in the past.

Selectman Robert Landry pressed for a vote, saying the board represents all Andover retirees not just town retirees, and that selectmen have limited authority to offset OPEB liability but raising rates was one area the state had afforded the panel some power.

"I think we owe it to all Andover residents to vote on this tonight," said Landry.

State law allows selectmen to raise retirees contributions to 50 percent.

This was a recommendation from the town OPEB panel, a volunteer group led by Michael Morris which studied OPEB for almost a year and presented its report to the town on March 31.

O'Donoghue pointed to the time and energy the board has devoted to OPEB.

"This issue has been on our table every single day for two years," O'Donoghue said.

Selectmen Landry, Alex Vispoli and O'Donoghue voted for the increase, while Dan Kowalski and Paul Salafia opposed it.

Town manager's plan

The plan, as it applies to 757 retirees over the age of 65, would increase the contributions of 325 them by $809 a year while switching them to a plan that provides better coverage, said Town Manager Andrew Flanagan, who authored the plan.

The town manager's plan would have no impact on the remaining 432 retirees who are 65 or older.

The plan also applies to 212 town retirees under 65 years of age. It would reduce the town's contribution to those non-Medicare plans by 5 percent a year for four years, bringing it to 50 percent contribution by fiscal 2020.

Of the 212 non-Medicare retirees, 153 are enrolled in HMO plans and 59 in PPO plans. The PPO enrollees would not be impacted by the change in Year one, Fiscal 2017.

The savings from Flanagan's plan over four years is approximately $2.8 million. The plan will direct that savings to the town's unfunded liability, and, by 2064 the plan will fully fund OPEB.

O'Donoghue said the board's decision was a tough one, and no matter what they did, there would be people unhappy with their action.

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