Minutes of the Chebeague Transition Committee March 27, 2007 at 5:30pm at the Parish House (moved to the Firehouse because of lack of heat). (Accepted 4/4/07)
Members present: Donna Damon, Mark Dyer, Leon Hamilton, David Hill, John Martin (Chair), Jim Phipps, Doug Ross and Carol White
Absent: Stephen Todd.
Beth Howe served as secretary.
The Meeting was called to order at 6:30 by David Hill. He introduced Dan Tetu, head of Norton Financial services. He is representing his partner company Norton Insurance to discuss options for health insurance for Town of Chebeague Island employees, as well as Transportation Reimbursement Accounts.
Since the Town of Chebeague has not hired any employees yet, the quotes he provided are not based on the demographics of that group, but on characteristics that Dan made up. This is important because the cost of plans can vary a great deal depending on the actual characteristics of the people hired, especially their age. The average age for health insurance plans in Maine is about 41. But since the total pool of employees for all the companies smaller than 50 employees is very large, adding a person with a health problem would have little impact on the rate.
The Town of Chebeague fits under state law in to the ³small group² insurance pool – all businesses, governmental units or whatever that are smaller than 50 people. These insurance plans are offered by many insurance companies and are standardized plans, not tailored to the specific needs of a particular company.
Dan said that most employers donıt cover part-time employees, though state law requires them to offer health insurance to employees who work as few as 10 hours per week.
A central issue that emerged during the discussion of the plans is what people on Chebeague expect health insurance to be like. John Martin argued that typically people are self-employed and have health insurance that has a large deductible in order to keep the monthly cost reasonable. Public sector health benefits tend to be richer than that, so the cost estimates might be a surprise. Leon Hamilton what the draft Town budget has assumed per employee per month? David Hill said that the per employee estimate was $500. So one way to look at the various plans was to ask what that $500 would buy. Donna Damon pointed out that the Town could pay a percentage of the premium and the employee could pay part. Dan Tetu said that he thinks it is essential for the employees to pay some part as an incentive to think about the cost of health care. The cost of health care rises about 12 to 15 percent a year, so the cost of insurance will go up. Plans with high deductibles typically go up less because the employees have more of an incentive to be careful about what they spend on health care. Also it is possible for the Town to offer a set amount per month, not a percentage. This means that employees have to absorb increases in the cost of the insurance unless the flat amount is raised.
Another issue that was discussed was the tradeoff between the cost of the plans and the quality of service, i.e. the difficulty of dealing with the insurance company. If the Town had its insurance through Norton or Maine Municipal, the Human Resources person at the town could deither go directly to the health insurer or they could ask the carrier – Norton on MMA – to deal with the insurance company. Dan Tetu said that he thought that Harvard Pilgrim has the best system for working with its subscribers.
The carriers covered in his presentation were: Maine Municipal Association, Aetna, and Anthem. Harvard Pilgrim is another logical choice but they will not make estimates without the actual demographics of the group to be covered.
Maine Municipal has five options:
Indemnity: insurance pays for any covered care from any physician.
Point of Service – like a Preferred Provider Organization where there are different charges to the patient for care within and outside of the network.
A less expensive indemnity plan
And two less expensive point of service plans.
The Maine Municipal options were then used as a comparison to the Aetna and Anthem plans which were spelled out on a series of spreadsheets. The costs given are for individuals, not family coverage and the term of the insurance is the calendar year. The notable thing about the plans is how many different types of plans were represented.
HMO: person has a primary care physician and is referred to others by that doctor. One plan has a deductible and one does not. The deductibles are capped by a yearly maximum, but the co-payments are not capped.
PPO: The employee can go to doctors within the network or outside of it. If they go to outside providers, they are charged more.
Portland Chamber of Commerce plans:
This was not as good coverage, with a higher out of pocket cost to the employee
Anthem Luminus Plan:
Anthem has two Health Incentive Account plans: If the employee is willing to fill out a health risk assessment they get a $50 incentive.
If they have a health problem and agree to get help for it, they get $100
If they get their illness under control, they get $200.
This works for health problems like smoking, diabetes or weight loss, but not for chronic ailments.
Anthem also has a Health Care Savings Arrangement (HCSA??) Plans. The employee has a high deductible plan. S/he can put money away before taxes in an account that belongs to the employee, caries over from year to year and can be invested. It can only be used to pay for health care.
Finally Anthem has a Health Care Reimbursement Arrangement where the employee has a high deductible plan and an account held by the employer that can only be used for health insurance. If the money is not used within a year, it goes back to the employer.
The initial set of spreadsheets gave rates if the Town and School Department employees were all part of the same plan. A second set gave estimates separately for school employees and Town employees. The school department estimates were less than the Town, but this was because Dan Tetu had assumed that the school employees would be younger.
Carol said that the issue for Chebeague is that the secession law said that if teachers who had worked for SAD 51 came to work for the Town of Chebeague, they had to be given ³comparable² benefits. If it were not possible to match the plan that they had with SAD 51, some adjustment could be made to pay them for the difference. Leon said he would prefer to have the same plan for everyone and leave it to them to take it or leave it.
There was also a discussion at the end of the meeting about whether employees could be enrolled before July 1 so that health insurance coverage could begin on July 1. Normally insurance companies would not allow such enrollment. Dan Tetu said that people who are COBRA eligible from their previous job could carry over their coverage, with the Town paying the cost. It is more expensive than basic coverage, but would only be needed for one month. Or employees could pay the cost themselves for that month.
The IRS allows companies to set up such accounts. The employee puts money away in their own account before taxes and the money can be used to reimburse them for the costs of public/mass transportation to commute to their job. The CTC would count as public transportation. The employee could be reimbursed up to $125 per month for the ferry and up to $225 for parking. There would be no difference between parking at Toute 1 and at the Blanchard lot.
The plan is offered by Group Dynamics of Falmouth and would cost the town $350 per year and $3.50 per employee per month.
There is also a similar arrangement for a company to set up accounts.
David Hill asked if an employee could be given a fixed amount by the Town and divide it as they chose between a health and/or a transportation account.