HomeMy WebLinkAbout2005-07-28 ad Hoc Health Insurance Task Force MinutesC/
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Health Insurance Task Force Meeting { E R K
July 28, 2005 M ASS.
The meeting convened at 7:00 p.m. in the Conference Room, 16 „ , t. ~geet , ft l a it g,
Massachusetts. Present were Chairman Ben Tafoya, committee members Don Green, Carl
McFadden, Chuck Robinson and Darlene Porter sitting in for Pat Iapicca. Also present were
Town Manager Peter Hechenbleikner and MTA representative Buddy Stevens.
On motion by Darlene Porter seconded by Donald Green the minutes of July 21, 2005, were
approved by a vote of 4-0-1 with Robinson abstaining.
Ben Tafoya reviewed the work program. The first priority is to work on the RFP since this needs
to be done by the middle of September. The second task is to keep in mind the longer range
changes that may be needed to the health insurance program.
Carl McFadden asked if the goal was to change the percentage of contribution by employees.
Ben Tafoya noted that the purpose is to have another set of eyes (the Task Force) look at how we
acquire health insurance for employees and retirees. The goal is to help the Town and
employees control what we spend on health insurance. The main thrust is the RFP. The task
force will then see what other recommendations we can make more broadly.
Carl McFadden asked about the history of bidding - do we get proposal and then negotiate them
or do we just take the bids. The Town Manager noted that although we are not obligated to bid
health insurance we find it is a good practice. We ask bidders to submit their best bid and that's
what we evaluate.
Donald Green asked what we pay for health insurance in total. The group health insurance paid
by the Town is approximately $6.9 million, the employees contribute 30% for a total cost of
about $10 million. The total payroll for the Town is about $42 million. Therefore, we pay
approximately 25% of salary for health insurance. Green asked how that compares to other
communities. Green also noted that the health insurance premium is a higher percentage of
salary for somebody making $30,000 than it is for somebody making $60,000. However, you
can have an employee making $30,000 per year who's spouse makes $300,000 a year and could
be covering them under the health insurance program. Green noted that we ought to be
providing health insurance based on an employees ability to pay. The standard for a single payer
system is that the employee pays 3% - 4% of their salary for health insurance, and the employer
pays 6%.
The Task Force went over the voluminous material that was submitted from Blue Cross Blue
Shield of our current program. There is a summary on page 8. The Task Force asked for
information on the monthly premium costs for other communities. Darlene Porter noted that the
information shows that the use of hospitals is appropriate - i.e. our employees and retirees use
the community hospitals where appropriate.
A request was made to summarize what we are paying in total for health insurance, and what is
being paid out on our behalf.
There was discussion about the coverage of retirees and the cost of the Medex program. The
Town Manager noted that the Town has consciously "subsidized" the cost for retirees. Reading
pays a higher percentage than average for Medicare supplement, at 70%. The Town, however,
does not pay any of Medicare part B.
Carl McFadden suggested that we should use a consultant to go out and get proposals for us and
evaluate them and come back with a specific recommendation. Steven Tringale is a resident of
Town and is in that business. Ben Tafoya will contact him and see if he can come to the next
meeting.
The committee asked for a summary of what the Health Insurance Advisory Committee is
suggesting with regard to the new bid process.
On motion by McFadden seconded by Robinson the Task Force adjourned at 8:25 p.m. by a vote
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