The city is asking its employees to join a state health insurance pool that officials hope will save the city $1 million annually in lower premiums.
All city offices will open at 10 a.m. Wednesday, instead of 8:30 a.m., as Mayor Carolyn Kirk and city Personnel Director David Bain host a meeting with municipal employees at Fuller School to answer questions about the potential switch.
The plan would have Gloucester join the Group Insurance Commission, the agency that manages health insurance plans for state employees.
First opened to cities and towns last year as part of Gov. Deval Patrick's Municipal Partnership Act, the GIC has been touted to communities as a way to reduce the ever-rising cost of health insurance by taking advantage of the economy of scale and greater bargaining power with insurance companies offered by the state.
Representatives of the municipal employee unions have already agreed to a deal with the city to accept the GIC, Kirk said last week, and the meeting today is designed to sell the plan to rank-and-file members, 70 percent of whom would have to accept for it to go into effect.
"Moving into the GIC is a critical step in saving the city money and turning back additional money to employees in these difficult budget times," Kirk said. "Every year we negotiate with different carriers and wait and see what the size of the increase is going to be. The difference is the bargaining power of the state; it is far greater than what we have."
Gloucester's health insurance costs last year increased by 6 percent after several double-digit increases earlier in the decade.
Cities and towns initially had until Oct. 1 to apply to join the GIC, but the state extended the deadline to Dec. 1. The new plan would go into effect July 1, 2009.
In addition to employees, City Council must also approve the switch. The council's Ordinances and Administration Committee voted to recommend approval of the plan last week and the full council is scheduled to vote on it tonight.
The city currently spends around $9 million each year on health insurance for its 700 employees and consultants have told the city a switch to the GIC could cut that number to around $8 million.
The change would apply to all employees, including teachers, but would not apply to retired teachers.
In addition to saving the city money, Kirk said consultants who have analyzed the different plans offered by the GIC told her that employees will pay lower premiums, as much as $100 less per month for some plans.
She said it would also make budgeting in the city easier by reducing some of the volatility in health care costs.
"In the GIC, the peaks and valleys are smoothed out, which is something I like," Kirk said. "It is difficult to budget with these huge swings."
Patrick Anderson can be reached at panderson@gloucestertimes.com.
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