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									MUNICIPAL HEALTH INSURANCE REFORM – SAMPLE REPORT




                                                             SAMPLE
Secretary
Executive Office for Administration and Finance
Via email to: MunicipalHealth@state.ma.us


RE: Annual Report Pursuant to 801 CMR 57.07(2)

Dear Secretary,

The City of Beeside did not use the new municipal health reform process M.G.L. c. 32B, Sections
21-23 in the fiscal year 2012 (July 1, 2011 – June 30, 2012) to make changes in health insurance
plans.

However, both the City Council and union officials have indicated they recognize the problems
facing the City as a result of increasing health costs, and would prefer to address the problems
through traditional collective bargaining. Thus, the City and the unions will be returning to the
bargaining table in September of 2012 to negotiate health care cost and plan design changes
with the intent of achieving necessary savings that can be applied later in fiscal year 2013.

As a point of information, the city has been engaged in bargaining about successor collective
bargaining agreements with each of its eight unions since the expiration of agreements on June
30, 2010. The focus of the City’s bargaining agenda has been to restrict the health insurance
plans to those with GIC-like plan design features (such as copays) but without an annual
deductible.

Please find attached documents detailing 1) the health insurance plans the City currently offers
to City employees, the employer and employee contributions to premiums for those plans, and
the number of subscribers in each plan; and 2) our calculation of the maximum possible savings
available if the City had made use of the new reform to the fullest extent possible. We estimate
the maximum possible total premium savings to be $4.6 million in the first year ($3.4 million in
employer premium savings and $1.2 million in employee premium savings).

Please feel free to contact me if you require any additional information.

                                                            Sincerely,

                                                            Mayor of Beeside
Health Plan Documentation
City of Beeside


If you increased all your plans’ design features (such as copays and deductibles) to the
benchmark GIC plans’ design features, how would this affect your premium costs?




                                                           Existing Plans                                GIC-Like version of Existing Plans

                                        Total                                                    Total
                                       Annual          Employer                Employee         Annual          Employer                 Employee
Plan                                  Premium                                                  Premium
Name                Enrollment          Cost       % share      $ cost      % share   $ cost     Cost        % share     $ cost       % share    $ cost


HMO A             Individual     50                  75%                     25%                            no change                no change

                                 23
                     Family       0                  75%                     25%                            no change                no change




PPO A             Individual     39                  75%                     25%                            no change                no change

                     Family      73                  75%                     25%                            no change                no change



                                 39
Medex             Individual      5                  85%                     15%                            no change                no change

                     Family      16                  85%                     15%                            no change                no change



TOTAL Annual Costs, All Plans
Calculation of Maximum Possible Savings
City of Beeside




                               Employer      Employee    Total Premium
Premium Cost                       Cost          Cost              Cost

Existing plans               $31,300,077   $10,489,755     $41,789,832

GIC- like plans              $27,873,949    $9,260,238     $37,134,188


TOTAL SAVINGS
by switching from
existing plans to
GIC-like plans                $3,426,128    $1,229,517      $4,655,644

								
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