Amherst-Pelham teachers want answers to health insurance ‘crisis’

  • Amherst Town Hall

Staff Writer
Sunday, April 15, 2018

AMHERST — A group of public school teachers is calling into question the oversight of the Amherst-Pelham Health Claims Trust Fund after an anticipated deficit has necessitated drastic, as well as expensive, changes to the health plans for both school and municipal employees.

Mick O’Connor, a social studies teacher at the Amherst Regional Middle School, on April 2 delivered a letter to the Select Board, signed by 68 members of the Amherst-Pelham Education Association, asking elected officials to hold someone accountable for what he terms a financial disaster, pointing to the complete deterioration of a near $7 million cushion in the health trust that existed on July 1, 2014.

“Is there any other department where you would accept a negative balance of $7 million over three years?” O’Connor asked.

This fiscal year the fund is scheduled to take in $15.66 million in revenue, but spend $18.24 million on claims, and end the year on June 30 with a $346,156 deficit.

In the letter, the teachers write, “The negative fallout from the collapse of the health trust is manifold and has serious consequences for the reputation of the government of the town of Amherst as a public entity that values transparency, the sustainability of health insurance for low-wage earners, and everyone else in the town’s employ, and the viability of school district finances for at least the next two years.”

An analysis of how the health trust has been used by employees, O’Connor said, shows that those responsible for handling the trust should have periodically increased premiums, possibly by between 10 and 15 percent, to maintain the fund balance. Those premium increases would have affected employees and the town and school budgets, which contribute 75 to 80 percent of the costs.

Despite multiple premium increases over the past year, including a 10 percent increase for both PPO and HMO plans that went into effect Oct. 1 as a way to counteract the decline, and adjustments to copays, Town Manager Paul Bockelman recently announced three major changes are being implemented to preserve coverage.

These changes include transitioning from a self-insured product to a fully-insured product through Blue Cross Blue Shield and the Massachusetts Interlocal Insurance Association, consolidating the entire risk pool to Blue Cross Blue Shield, and implementing various plan design adjustments, such as introducing deductibles of $300 for individuals and $900 for families.

Bockelman told the Select Board it’s a legitimate criticism that officials should have been raising prices all along, but noted that insurance experts had previously informed the town that the trust was holding too much money.

“In hindsight, probably, we should have been making these changes incrementally along the way,” Bockelman said.

Large claims?

Bockelman has blamed much of the deficit on a handful of very large claims.

This is a matter disputed by Jean Fay, president of the Amherst-Pelham Education Association, which has 580 members in three distinct bargaining units: teachers, clerical staff and paraeductaors

Fay said a cash-flow analysis of the trust’s ledgers, which was not immediately provided to her by the town, was obtained with assistance from a Massachusetts Teachers Association attorney. This analysis by Boston Benefit Partners LLC shows that the health trust ran a deficit for 33 of the 40 months, yet no adjustments were made by those overseeing it.

Fay said she hasn’t learned why this was allowed to happen and why documents were not provided until February.

“Unfortunately, it was extremely difficult for APEA representatives and other (union) representatives to receive information that was essential to any of us making an informed recommendation,” Fay said.

Still, the 14-member Employee Health Insurance Advisory Committee, or IAC, which is made up of union representatives and representatives for retirees, recommended the health plan changes, though Fay and three others abstained and one person was absent.

“We were put in a place where there was no other choice but to make plan design changes,” Fay said.

Bockelman said there were no surprises about where the trust stood.

“The fact of the matter is that information on the trust had been shared on a pretty regular basis through the IAC. It was not new,” Bockelman said.

Fay said it is possible other factors led officials to take their eyes off the trust. It was doing so well that two premium holidays were held in May 2009 and April 2013 when no premiums were collected from employees, meaning higher take-home pay for workers and no payments having to come from the town and school budgets.

After the unexpected death of Town Manager John Musante in September 2015, interim town managers were leading Amherst until Bockelman began his tenure in August 2016.

‘Blow’ to families

O’Connor said he worries that the message of the health plan changes is that health care is a “privilege reserved for the wealthy” and that lower-paid employees are bearing the burden, potentially losing 10 percent of their buying power with institution of deductibles and higher copays for specialists, lab work and emergency room visits.

Claire Cocco, another middle school social studies teacher, told the Select Board that as the main earner in her family, the rising health care costs has serious consequences.

“It is a real blow to see the plan with a $900 deductible, when there was no deductible previously,” Cocco said.

Bockelman acknowledged the higher costs will be a challenge for employees and retirees, but that the rates and benefits are similar to those in the state Group Insurance Commission, which includes employees for the city of Northampton and at the University of Massachusetts.

O’Connor said teachers are asking for transparency, referring their concerns to the state inspector general. They also may soon file a Freedom of Information Act request to obtain communication between Bockelman and the Select Board. A forensic audit, which would be expensive to undertake, is also being considered, he said.

The concerns are coming in advance of APEA members voting on a new three-year contract next week.

“In the end, the teachers have the only contract that has ratification power over health plan changes,” said O’Connor, who intends to vote for the contract.

Fay said she doesn’t anticipate trouble in getting the 51 percent needed to ratify the contract, noting she feels good about its contents following the use of interest-based bargaining.

Bockelman said he is in the midst of 22 presentations scheduled with employees where Blue Cross Blue Shield and MIAA representatives will help them understand the health plan changes and adjust as well as they can. These began Monday at Wildwood School.

Fay said she will continue to be an advocate for single-payer health care. That, she argues, remains the best long-term way to help employees.

Scott Merzbach can be reached at smerzbach@gazettenet.com.