In a move backed by both the city’s employee unions and elected officials, Gloucester employees will be entering into one of state’s largest health insurance pools, the Group Insurance Commission, saving Gloucester taxpayers a projected $3.5 million over the agreed four-year period, throughout the length of plan.
Assuming that city employees past and present switch to plans offered by GIC, the city is set to save $1 million yearly, and $500,000 for the remainder of this fiscal year, which began July 1 and runs through next June 30. The agreement would end in June of 2017; according to a prepared statement from Mayor Carolyn Kirk.
The actual savings would be greater, but the agreement with the Public Employee Committee — which includes representatives from all of the city’s unions and retirees — calls for setting aside money to offset the impact of the switch, to be determined by the PEC.
“The buying power of the GIC drives rates down for employees and savings up for municipalities,” Kirk said in the prepared statement announcing the agreement. “After many years of talking about joining the GIC, I am so pleased to announce the agreement with our city and school unions that is projected to save Gloucester $3.5 million over the next few years.”
The push for a GIC agreement was at least the third in recent years, but past efforts to enroll the city in the state pool all fell through; union representatives in the past were skeptical the GIC would result in increased rates and more leverage for the city.
The GIC does offer flexible spending and premiums for employees will be less, but out-of-pocket expenses will be on the rise as well, according to the firefighter union chief Steve Aiello.
Aiello said employees need to be better educated about the insurance options before they have to make choice later in the year, encouraging flexible spending.
At the same time, Aiello said it’s important insurance costs do not prevent someone from seeking medical attention or seeing a doctor.
”It could be a win-win situation for everyone,” he said.
In order for the agreement to be accepted, it had to receive support from the union representatives as well as a majority of the full roster of city union members.
Aeillo said a boot camp will be in the works later this year to encourage healthier lifestyles and let employees know of the rising co-payments with the GIC.
“In addition if employees select a similar plan to the one they are in now, for example, a family would save between $2,700 and $3,200 every year on the amount they pay for their share of health insurance,” Kirk’s statement reads.
Up until recently, there was a $500 deductible; once an employee spent $500, there were little to no out of pocket costs, which will change with GIC plans, Aiello said.
“We are trying to be proactive rather than reactive,” he said.
Group Insurance Commission plans are enacted in a number of other cities and towns; Gloucester is set to change plans on Jan. 1 of next year.
James Niedzinski can be reached at 978-283-7000, x 3455 or at firstname.lastname@example.org.