2008-11-05-AC -GIC-memo - Laserfiche WebLink

Browse Search

 MTA is supportive and will provide consulting services (through Boston Benefit Partners) to local unions, upon their request, analyzing plan choices and cost savings to assist in negotiations.  Process has an established roadmap already (though fewer than 24 communities/school districts have gone all the way down the road). Information is available from MAPC, including examples of negotiated agreements with unions over GIC. Brookline has also been very generous in providing documents from their ongoing analysis and negotiation.  The state’s current budget deficit and gloomy revenue forecasts call for bold steps to address major cost centers. The current crisis may help break down the usual barriers.  Though the state may remove the union veto, starting now is low risk for us (we already have coalition bargaining) and the potential for state action could be a catalyst for the unions to be cooperative (chance to join on their terms). Recommendation on moving forward:  Determine potential for cost savings in Lexington and conduct comparative analysis of plans (as Brookline has done - engage consultant, solicit RFPs)  Preliminary discussions with unions - introduce concept, encourage them to engage a consultant (MTA will provide one at no cost to the local teachers union) to independently determine the benefit to employees and provide some comparative analysis of plans  Begin negotiations to develop a win/win plan benefit both employees and the town. Potential areas for negotiation/barriers to overcome include: the absence of a Blue Cross plan offering in the GIC o demonstrating that, despite increased co-pays, the vast majority of o subscribers will experience lower costs overall because of lower plan costs agreeing on a reasonable estimate of anticipated year-1 savings (requires o making assumptions about which plan(s) will have the most subscribers; this can be influenced by varying the town contribution % by plan) and deciding how this will be shared between the town and employees  We urge the town to keep its eye on the big win with GIC – slowing the growth of health benefit expenses. With this primary goal in mind, and keeping year-1 expense reduction as a secondary goal to the first, we can have a thoughtful discussion around such strategies as: Varying town contribution % by plan to influence subscriber choice and o reward employees selecting lower-cost plans Providing higher salaries in exchange for reducing town’s health benefit o expenses Sharing a greater proportion of annual health benefit expense savings with o employees in exchange for a lower town contribution % Page 3 of 3