Health insurance shuffle looms Barre may drop BC/Bs, switch to CIGNA
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By David Delcore Times Argus Staff - Published: December 5, 2008
BARRE – City officials are inching ever closer to severing ties with the state's largest private health insurance carrier.
Two years after dropping out of the Vermont League of Cities and Towns insurance pool in order to maintain Barre's long-running association with Blue Cross/Blue Shield of Vermont, city officials are seriously considering an about-face.
Still reeling from a 34 percent increase in health insurance premiums that was recently quoted by Blue Cross representatives, Mayor Thomas Lauzon said Thursday there is a very real possibility Barre could rejoin the VLCT's Health Insurance Trust, which now does business with CIGNA.
According to Lauzon, all city employees were scheduled to attend an 8 a.m. meeting with CIGNA representatives at Alumni Hall today. He described the meeting as part of an ongoing information-gathering process that was launched shortly after he learned the city's annual health insurance premiums would climb a whopping $375,000 during the calendar year that starts Jan. 1 if no changes were made to the city's current plan with Blue Cross.
Lauzon, who called an emergency meeting of employees last month, has since met privately with representatives of all four municipal labor unions, as well as the city's non-union employees, on two separate occasions. He described those meetings as tense, but productive given the sensitive nature of the subject matter.
"The meetings haven't been easy (and) they haven't been fun, but I am appreciative that we are having them," he said, suggesting today's session with CIGNA was arranged to give employees an opportunity to learn more about two alternative health insurance plans that are actively being considered.
According to Lauzon, both plans would represent "significant savings" for the city and its employees, while averting the need to eliminate jobs in order for the city to absorb the increase that was quoted by Blue Cross.
Lauzon said the city would save about $100,000 – still a 25 percent increase – by shifting to the traditional health insurance plan that is offered by CIGNA which provides coverage that is "comparable to Blue Cross." However, he said the savings would be far greater if the city went with a high-deductible health savings account plan offered by CIGNA.
Lauzon said the city's health care costs would climb roughly $100,000 – a 10 percent increase – under CIGNA's HSA plan, effectively shaving $275,000 off the figure originally quoted by Blue Cross. He said Blue Cross has quoted an HSA plan of its own that was substantially more expensive than the one offered by CIGNA.
According to Lauzon, City Manager John has recommended CIGNA's HSA plan though no final decisions have been made.
"At this point the ball is pretty much squarely in their court," he said of the city's 92 employees.
Most of those employees are members of one of four local labor unions, all of which have negotiated contracts that guarantee an insurance package that is as good, or better, than the coverage they have historically received from Blue Cross.
If the city is going to change insurers, Lauzon said that decision will have to be made by Dec. 15 – putting pressure on all sides to come to an agreement.
"It's a tough situation because we're asking them (employees) to absorb and process a lot of information very quickly," he said. "That's not lost on me."
Following today's meeting with CIGNA officials Lauzon said yet another private session with employee representatives would be held next week to determine what, if any, headway has been made.
"I'm very hopeful we'll see some relief," he said.
If not, Lauzon offered what has been his unwavering assessment of clinging to the status quo.
"It will require a reduction in force," he said.
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