Mayor Curtatone advocating for GIC last August.

Employees, retirees to pay same rate upon entering

By Andrew Firestone

It seems the city’s health insurance crisis has finally subsided. Beginning January 1, 2012, all retirees and employees of Somerville will join the Group Insurance Commission (GIC), an act that the city says will save $9 million for that year alone. The GIC is a state program that provides coverage to more than 390,000 people.

The switch comes after a year of tense negotiation, along with a failure on the part of the unions to come up with a “planned design” that would come close to beating the GIC’s rates. The agreement will allow the city to enter the GIC on January 1, 2012 for a six and a half year period that extends until June 30, 2018. Union and retiree representatives ratified the agreement with Mayor Joseph Curtatone on the morning of September 26.

“This agreement represents a fair compromise,” Curtatone said. “We have put together a health insurance package that respects the needs of our employees, our retirees and Somerville taxpayers.”

Curatone was quick to point out the end of a crisis that had consumed more and more of the city budget every year, overtaking the funds from state aid in 2010. “Our health care costs had tripled during the past decade and it was imperative to move to a more stable system.”

Employees will have a choice of some of the top-rated health plans in the nation, including Harvard Pilgrim, Tufts, Fallon and Health New England.

“This is excellent coverage, enjoyed by everyone who works for the state and by many cities and towns in Massachusetts,” Curtatone said. “Arlington and Medford will be joining the GIC at the same time we are. In fact, my family will be covered through the GIC.”

Thanks to the agreement, all employees and retirees will enter at the same contribution levels. In the current system, retirees pay higher contribution levels for group plans than most employees. All employees will enter the GIC paying for 15 percent of their coverage. In July of 2013 the contribution level will increase to 17.5 percent and in July of 2015 the contribution level will increase to 20 percent. Higher cost indemnity plans will require a 25 percent contribution from employees and retirees.

“It was very important for our retirees that they not have to pay a higher contribution level than employees,” said retiree representative Linda Vitiello. “Everyone is going to be a retiree someday and we had to eliminate that disparity.”

The city originally began meeting last September with representatives from its collective bargaining units and its retirees concerning a shift to the GIC after the Board of Aldermen voted to join the program following weeks of tense debate. The GIC bill passed in July in the state legislature opened the door by allowing municipalities to join if they could prove significant budget strain.

The agreement represents the reconciliation of the management-labor talks that began last year between the city and its public unions.

“To their credit, city officials decided not to force employees into the GIC under the very restrictive conditions required under the new law, but instead agreed to continue bargaining with the Public Employee Committee, which represents all of the unions as well as retirees,” said Jackie Lawrence, President of the Somerville Teachers Association, which represents 650 teachers, paraprofessionals and adult educators. “We will be paying higher co-payments and deductibles out of our pockets, which will bring down the premium costs considerably. Eventually our members will also pay a slightly larger share of the premiums, so we and the city will both benefit from the lower premium rates.”