Mayor Domenic J. Sarno announced today that the City of Springfield has ascertained its insurance rate for the upcoming Fiscal Year from the Commonwealth of Massachusetts Group Insurance Commission (GIC). The GIC released its rates on Friday, March 2, 2012.
The City funds 75% of the health insurance premium and the employees/retirees fund 25%. The City has approximately 4,258 employees enrolled in health coverage and 3,775 retirees. The insurance premium cost for the City and School employees and retirees will increase by 1.4% this year resulting in an additional cost of $866,567. This current year the City’s share for health and dental insurance is $62,013,245.
The City entered the GIC in 2007. There have been two studies of the City’s experience in the GIC and both point to savings in the tens of millions of dollars as compared to the City’s previous plan. In fact, the cost avoidance using the GIC for the past five years, assuming a 10% cost increase if the City had a non-GIC carrier, is $86.3 million. The Boston Foundation’s April 2011 report noted that the average premium increase for Massachusetts municipalities was 10.8% annually for the past 10 years, while the GIC’s average annual increase for the same period was 6.4%. Additionally, Mercer, a national health insurance consulting firm, was predicting a national average increase of 5.7% for 2012.
“The City has a duty to ensure we do what is fiscally prudent and responsible to control escalating health insurance plan costs while simultaneously meeting our obligations to city employees,” stated Mayor Domenic J. Sarno. “It is clear that the City’s participation in the Group Insurance Commission has saved the taxpayers millions of dollars since joining in 2007 and the City will continue to participate in the program that provides the greatest financial benefit and at this point it does not seem fiscally responsible to change plans.”
The GIC offers employees twelve (12) different health insurance options. It offers retirees seven (7) different options. The City has a majority of its employees enrolled in two (2) of the least costly health insurance plans. Employees enrolled in one of these popular plans, Unicare Community Choice, will actually see a decrease in their health insurance premium in the upcoming year.
The GIC has announced that it will go out to bid next year for all of its health care plans.