Framingham Could Save $17.7 Million Over Next 3 Years With New Insurance Plan

Press release from the Town of Framingham:

The Framingham Board of Selectmen is pleased to announce an agreement with the Public Employee Committee (PEC) that results in the transfer of the Town’s health insurance coverage to the State’s Group Insurance Commission (GIC).

The decision will result in an estimated $17.7 million savings over the next 3 years to the town, stated the press release.

The transfer of health insurance subscribers is an option available to all municipalities in the Commonwealth to help cities and towns reduce the costs of providing health insurance to their employees.

These costs have placed an ever burgeoning strain on municipal budgets throughout the state, with Framingham being no exception, said the release. 

The option to transfer subscribers to the state plan was made possible through legislative reforms which were passed by the State Legislature.
 
Since the reforms were first enacted, the Town was able through previous agreements with the (PEC) to achieve cost savings through plan design changes and shifts in the premium contribution ratio. 

“Over the past several months, the Town and PEC sought in good faith to reach a similar agreement to achieve cost savings through plan design and further shifts in employee premium contributions. But at the end of the day, the estimated cost saving differences to the town between the two options (GIC, $17.7 million vs. the last PEC offer, $11.6 million) was just too large a delta for the board not to take the GIC option. This is a significant cost savings to the Town and the taxpayers while still providing comprehensive health insurance with very competitive rates for our employees," said Framingham Selectmen Chair Dennis Giombetti. 

"Employees of the State and many municipal employees are part of the GIC health insurance system. I commend the PEC for voting to approve this agreement although I suspect they would have preferred not to transfer to the GIC," said Giombetti. "Moreover, pursuant to the statutory process under Chapter 32B, the Town will be sharing 25% of the estimated first year savings from the transfer to help mitigate the impacts of this transfer on the Town’s employees, retirees and their families."

"Selectmen communicated a strong preference to the PEC that it prefers to have a large percentage of the mitigation funds go to offset projected cost increases to retirees primarily for co-pays and prescription drugs.," said Giombetti. "The agreement calls for 50% of all mitigation funds to be distributed to retirees. Unlike some other communities, Framingham pays between 75%-84% of premium costs for retirees, depending on the plan chosen by the retiree. This percentage is substantially above the 50% contribution required under state law and the amounts paid by many other communities. The agreement also calls for the Town to pay up to $75,000 for administrative costs associated with the Health Reimbursement Arrangement.”

Framingham Town Manager Bob Halpin said "the Town looks forward to continuing to work with the PEC going forward to help achieve cost savings for the Town in a manner that impacts subscribers as minimally as possible while recognizing the duty to the Town’s taxpayers to provide them with outstanding and cost-effective public services.”

Editor's Note: First published at 4:04 p.m. Updated with photo at 4:18 p.m.