The Board of Selectmen will vote next Tuesday on whether to continue purchasing health insurance for retired teachers through a state-run group insurance program or to switch to the Minuteman Nashoba Health Group (MNHG), a vote that will affect retired teachers and their spouses beginning next June.
All Harvard town employees and retirees except retired teachers now get their health care coverage through MNHG, a joint-purchase group that includes a dozen towns and four regional school districts. Harvard has been a member of the group since it was formed 27 years ago.
The selectmen’s upcoming decision was the subject of a public hearing last week at which about 50 current and former teachers, along with 30 who sent letters, unanimously opposed switching their coverage to MNHG.
A crucial difference between the two insurance programs is how the premium costs are divided between the retirees and the town. If the selectmen vote to go with MNHG, the retired teachers’ share of the premiums will immediately rise to 25 percent. At present, under the state program, teachers who retired before 1990 pay only 10 percent of the premium and the town pays 90 percent. Teachers who retired more recently pay 15 percent, with the town paying 85 percent.
Town employees and retirees who are already covered by MNGH plans now pay 25 percent of their premium costs. And current teachers’ share is rising to 20 or 25 percent (depending on their date of hire) by 2019 under the terms of their new contract. Raising the rates for retired teachers would create greater parity among all town employees, said Assistant Town Administrator Marie Sobalvarro.
According to an email from Sobalvarro, an auditor predicted that raising the retired teachers’ share of the premiums would lower the town’s cost by about $215,000 a year. In effect, that cost would be shifted from the town to the retirees. At the same time, the premiums themselves are likely to continue to rise in the future. But Sobalvarro says the rates in the two programs are rising at more or less the same pace.
All together, the town’s total health insurance bill for all town employees, current and retired, is $3.17 million, or a little more than 13 percent of the town’s fiscal 2018 budget. Most of that amount (about $2.58 million) covers health insurance for current employees—police, librarians, Town Hall staff, teachers, DPW workers—and also for all retirees except the retired teachers. The remainder ($591,000) accounts for the town’s share of the retired teachers’ premiums. The state bills Harvard for its coverage in the state-run group program, the Group Insurance Commission Retired Municipal Teachers program.
Nine years ago, the selectmen considered moving all town employees to the state’s Group Insurance Commission program, of which the Retired Municipal Teachers program is a small part. But at that time Harvard’s unionized employees, including teachers (but not retirees), objected to leaving MNGH. According to Town Administrator Tim Bragan, their objections arose because the state program had just sharply increased its deductibles and copayments. The employees opted for MNGH then, Bragan said, because Harvard would have some input into that group’s decisions on such costs.
Sobalvarro also pointed out that the number of municipalities taking part in the state-run program has dropped from 55 to 33 in the past seven years. And in January 2016 the executive director of the Group Insurance Commission recommended in a public hearing that the GIC raise employee premium contributions to 25 percent.
