Workers bail out Barre city; change insurance carrier
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By David Delcore Times Argus Staff - Published: December 19, 2008
BARRE – At a time when big government is bailing out big business, a small city got a helping hand from its workforce this week.
In an eleventh-hour move that will save an as-yet-undetermined amount of money, city officials have opted to end their long-time association with Blue Cross Blue Shield of Vermont in favor of buying health insurance through the Vermont League of Cities and Towns' Health Trust.
Although at least one local labor union opposed the shift that will go into effect Jan. 1, City Manager John Craig said there was enough support among the city's remaining union and non-union employees to justify a change that could collectively save employees and taxpayers as much as $250,000 next year.
"I give the employees a lot of credit," Craig said. "They came to meetings, they asked good questions and they didn't just say 'no.'"
Had they done so in larger numbers, Craig, who capped a dizzying month of number-crunching, negotiating and "nudging," conceded he may have made the change anyway in order to minimize layoffs that would have been needed for the city to cover the 34 percent increase that was quoted by Blue Cross just last month.
"It's a hassle to change insurance (carriers), but it's more of a hassle to pay higher premiums," he said, referring to the jaw-dropping $375,000 increase the city would have had to absorb if it stayed with Blue Cross.
Faced with that increase, city officials moved swiftly to assess their options – including rejoining the VLCT-run Health Trust – while inviting employees to participate in a collaborative discussion of their most expensive and valued benefit. Ironically, Barre opted out of the Health Trust two years ago when the VLCT dropped Blue Cross for CIGNA.
At the time, contracts for all four municipal labor unions specified Blue Cross as the city's health insurance provider and officials were able to obtain a favorable two-year quote from the state's largest private health insurance carrier. Three of those four contracts were renegotiated, giving the city the right to switch insurers provided that the coverage was comparable to or better than that contained in Blue Cross plans.
According to Craig, that language would likely have given him the authority to switch to CIGNA, but he credits a whirlwind round of negotiations with unionized members of the city's public works department for allowing the city to introduce high deductible health savings accounts as an insurance option.
According to Craig, the HSA plan represents the greatest potential savings for both the city and its employees. Unionized firefighters have tentatively agreed to similar language and members of the police union are said to be thinking about doing the same. Only the city's unionized clerical and custodial staff has rejected the proposed language – a decision that will force them to choose from two of CIGNA's more traditional health insurance plans.
"They felt it was unfair for the city to even bring up the option," he said of the bargaining unit, which is organized under the auspices of the United Steelworkers of America.
Members of the bargaining unit deferred comment to Fred McGrath, president of the local union. Attempts to reach McGrath at his office were unsuccessful.
In order to accommodate the change in insurers, Craig shut down city operations for two hours on Thursday so employees could discuss their enrollment options with CIGNA representatives in council chambers at City Hall. All employees must select one of the three plans by the end of business today if they want to be insured through the city.
In a move designed to encourage employees to enroll in an HSA plan, city officials have agreed to pay 100 percent of the premiums next year and to contribute 20 percent of the deductible — $300 for those enrolled in single plans and $600 for those with two-person and family plans. That would limit the employees' out-of-pocket plan to $1,200 or $2,400 depending on the plan. In addition, the city has agreed to loan employees who incur medical expenses early on in the calendar year money to cover their deductibles.
According to Craig, the HSA plan will be an ongoing source of discussion and negotiation during coming months, and if the city and its unions can't agree on how the cost of the plan should be shared going forward, it will be discontinued as an option. In any event, he said the city has work to do with all four unions on the health insurance front.
"We don't have a long-term solution," he said, describing the shift to CIGNA as a one-year fix that buys all sides time to more fully evaluate insurance options without the pressure of a looming deadline.
That would be a welcome change, according to Firefighter David Gladding, who said the compressed time frame of the recently concluded discussions, coupled with the threat of possible lay-offs, placed employees under immense pressure.
"It's a lot of information to take in and absorb in such a short amount of time," he said, noting Barre has been doing business with Blue Cross for decades and its plans were well-known quantities to everyone who works for the city.
Gladding, who is president of the local firefighters union, said that likely explains what, in many cases, was a reluctant endorsement of the shift to CIGNA.
"Nobody likes change, because with change comes uncertainty," he said.
However, Gladding did credit Craig for setting up a process that gave employees some say as various options were considered.
"It's a nice experience to be part of the decision-making process," he said, echoing Craig's suggestion that the discussion involving health insurance is just beginning.
"We're looking forward to working with the city to come to a satisfactory agreement regarding health insurance," Gladding said. "I don't think any union wants to play ping-pong with health insurance."
That certainly hasn't been Barre's history, according to the city's longest serving employee.
City Engineer Reginald Abare said he has been insured by Blue Cross since joining the city's workforce nearly 40 years ago.
"We've always been with Blue Cross," he said.
Although many employees were taking what little time they have to weigh their options, City Clerk Carol Dawes said she was eager to take full advantage of the HSA plan.
"It's going to save me money," she said.
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