A bill that would allow municipalities join the state employee health insurance pool received final passage Wednesday and is headed to the governor’s desk.
The House approved the bill 82-61 after a few hours of debate.
Republican lawmakers felt the bill was unnecessary because there already are several insurance products in the market for municipalities, including the health insurance exchange, the Connecticut Partnership Plan, and the Municipal Health Insurance Plan.
But those options would not allow municipal employees into the state employee pool to realize the savings of a larger risk pool. The basic assumption behind the legislation is that in most cases the state plan and benefits are much richer and offered at a much better rate than what a municipality could access in the market on its own.
Rep. Peter Tercyak, D-New Britain, said the bill offers municipalities the option to apply to join the state employee health insurance plan to create the larger pool. Under the current Connecticut Partnership Plan, local governments can receive the benefits of the state employee plan, but they are paying more than state employees because their pooled risk is kept separate from the state employees.
“In a pool of 200,000 covered lives, we don’t expect there to be a loss by moving some people in,” Tercyak said Wednesday during the floor debate.
State Comptroller Kevin Lembo would analyze the risk of the municipality and decide whether they would be able to join the state employee pool. Also the State Employees Bargaining Agent Coalition would first need to agree to allow the municipal employees into the pool and then municipalities will be able to submit their claims data to Lembo’s office.
Tercyak said this would help municipalities save money on their healthcare costs.
He said a survey conducted by the Connecticut Education Association found that small towns like Westbrook would save $250,000 annually. East Haven would save more than $500,000 and the Greenwich Board of Education would save more than $1 million if they joined the state employees health insurance pool. He said Stamford would do even better and save more than $7 million.
“And nobody is forced to save,” Tercyak said. “They can join if they want to.”
Rep. Rob Sampson, R-Wolcott, said he can understand the desire municipalities would have to join the state employee plan, but he’s concerned it’s going to get everyone on that plan and it will cease to be something municipalities can include as part of their negotiations with its employees.
Sampson said he doesn’t see how the state can foresee the unforeseen claims experience from municipalities, if they are added.
“At the end of the day, if they join the state employee plan some will indeed get greater benefits, but some benefits will be lost,” Sampson said.
He said that’s because when the state implements new coverage mandates it often excludes its own plan.
Sampson said year-after-year they hear the answer to reduced insurance premiums is “pooling,” but if pooling is so good then “why aren’t we actually doing pooling” for the plans that are currently being offered to municipalities?
The labor unions who lobbied in favor of the bill said the legislation offers true pooling to municipalities for the first time.
“This bill is a win-win scenario,” AFSCME Council 4 Executive Director Sal Luciano said. “By applying the principal of bulk purchasing to health care, the legislature has taken a bold step forward to help municipalities rein in rising costs while providing taxpayers with significant savings and ensuring employees access to quality, affordable coverage.”
AFSCME Council 4 represents 32,000 public service workers.
While labor unions hailed the passage of the bill, Republicans used it as an opportunity to present part of their budget proposal.
The amendment proposed by Rep. Vincent Candelora, R-North Branford, would have required the state and labor unions to find the $253 million in savings it promised as part of the 2011 concession deal.
Rep. Chris Davis, R-East Windsor, said it’s only fair to the taxpayers of Connecticut to find those savings, instead of asking taxpayers to find it. The labor savings were part of the Republican budget proposal released last month.
But Tercyak alleged that “it’s just not fair,” to ask the state employees to give more.
He suggested that the state should look elsewhere in the budget for the savings.
House Majority Leader Joe Aresimowicz said he expected to hear this amendment called as part of the budget debate. He said he didn’t expect to hear it called on a bill that seeks to save municipalities money.
“We continually go back to the same well of our state employees,” Aresimowicz said.
He said the amendment was troublesome and suggested maybe they should have a real debate about income inequality, “instead of going to the lowest common denominator and pulling everybody down.”
The amendment was defeated 81-61 along party lines.