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Donchess, Board of Aldermen considering changes to city employee health care plan

By ADAM URQUHART | Mar 26, 2020

NASHUA – Members of the Board of Aldermen are mulling over whether to adopt an ordinance that seeks to make changes to the health plan section of the unaffiliated employees personnel policies while city health care costs are on the rise.

During an unusual Board of Aldermen meeting Tuesday night, some members joined the meeting remotely via video conference or by calling in while practicing social distancing, as others who were present at City Hall sat with distance between one another. Mayor Jim Donchess was physically in attendance for the meeting, and outlined Ordinance 20-011, which deals with these revisions. As it is, city health care costs have gone up $3.3 million in the current fiscal year, and are projected to go up $3 million again next year.

“The causes are multiple, increased claims, increased prescription drug costs, a work force that is aging and other price increases,” Donchess said.

Donchess asked Administrative Services and Financial Services to work with the city’s consultants, Workplace Benefit Solutions, to come up with what are called plan design changes to look at the possibility of bringing costs down, or reducing the rate of increase. Donchess said that they have met and have come up with recommendations that could save considerable money for the city and for the employees as well.

The first group the city is proposing be asked to make these plan design changes are these unaffiliated, or so called merit employees. Donchess said these employees have already been met with regarding these changes.

“The primary goal is actually to get people to switch to the high deductible,” Donchess said.

Even if people stay with the Health Maintenance Organization (HMO), Donchess said the employees’ weekly deduction from their paycheck would go down by 15 percent. The changes included in the ordinance:

A $20 co-pay increase to $25.

A $250 individual / $500 2-person or family inpatient / outpatient deductible increase to $1,500 / $3,000.

Pharmacy copays increase from $5/$15/$35 ($5/$30/$70 mail order) to $10/$30/$50 ($20/$60/$100 mail order).

The deductibles in the High Deductible Health Plan with Health Savings Account are unchanged. Deductibles remain at $2,000 individual and $4,000 for a couple or family. The City’s contributions to Health Savings Accounts remain at $1,500 for an individual and $3,000 for a couple or family.

Effective July 1, the City HSA contribution will be distributed in two installments, one on or about July 1 and one on or about Oct. 1, if an employee is required to pay more towards his/her deductible than the initial 50% contribution. Upon presentation of suitable documentation, the City will contribute the remaining 50% before October 1.

Employees who join the HDHP w/ HSA at any time other than July 1 will receive a pro-rated City contribution of $125 monthly for a single plan and $250 monthly for a 2-person or family plan for each full month remaining in that fiscal year.

It is anticipated that with these changes would reduce the health care claims charged to the city. Donchess said the high deductible plan could benefit more people.

Donchess said if the city is going to institute this, it needs to be done by the first meeting in April. Enrollment period for the unaffiliated employees and all employees is in mid-April. Board members voted to suspend the rules to allow for a second reading and then voted to table the ordinance until their next meeting April 14 for a final reading and discussion before voting.

Adam Urquhart may be contacted at 594-1206, or at aurquhart@nashuatelegraph.com.

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