Larry Smith, of the Vermont League of Cities and Towns, met with board members to go over the new state health care system and how it will affect the town. The new system goes into effect in January, Smith said, and employers can choose their plan through Vermont Health Connect (VHC) starting October 1. Initially, individuals and groups (including businesses and municipalities) with up to 50 employees will be required to get their medical insurance through the exchange. By 2016, groups with up to 100 employees will get their insurance through VHC. In 2017, everyone in Vermont, except those with certain exemptions (such as Medicare), will be required to purchase health insurance through the exchange.
The new system is mandatory. There are four basic plans (bronze, silver, gold, platinum) offered by two insurance carriers (Blue Cross and Blue Shield and MVP) under the new system. “The Vermont Health Exchange will be the only place to purchase insurance if you have 50 or fewer employees,” Smith said. “There will be no private market outside of the exchange. By 2017 the plan is to go to single-payer.”
Smith said, as an employer, the town and selectboard only need to determine how much they’re going to pay. “Then the employees can pick any plan. If it costs more than you funded, they pay the difference.”
Smith also suggested the selectboard make their decision and sign on with VHC as close to October 1 as they can to avoid a rush of employers at the last minute. After they make their decision, Smith said employees will be notified to choose their coverage plan. Employees have until December 31 to make the choice, but Smith suggested that they sign up before December 1 to avoid delays in coverage.
Board chair Randy Terk asked if there was a penalty for individuals who don’t have health insurance. “All individuals and employees are required to have health coverage in 2014. The penalty for not having it is $100 in the first year, but it increases every year so it doesn’t make sense to go without it.”
Board member Tom Baltrus noted that there are federal subsidies for individuals to purchase health coverage. He suggested that an employer could determine how much the subsidy is and pay the difference. Smith said the subsidy was only for people who have no employer contribution, but he said it could be an option to drop health insurance benefits for employees. “You may want to decide whether you want to get out of the health care business altogether,” he said.
The town currently provides 100% coverage for their employees, a level prompted by a Town Meeting vote several years ago. Currently, the town has a high deductible plan, and they fund employees’ health care savings accounts (HSAs) with the annual deductible amount. According to Smith’s information, the town’s current annual cost for employee health coverage is $322,749. To continue funding 100% of employees’ health insurance under the new system would cost the town more, and substantially more in the initial year.
If the town were to choose the top “platinum” level of coverage, which covers about 90% of health care costs and has a roughly 10% deductible, it would cost the town almost $412,000 the first year.
That number might go down in subsequent years, however, because rather than funding an annual HSA, they would fund a health reimbursement account (HRA) which, unlike an HSA, is a revolving account that belongs to the town and would only need to be “topped off” annually. Current HSA funds are owned by the employees, and the amount that isn’t used at the end of each year is theirs to use as they wish. For some employees, the HRA, even with the top coverage, could feel like less even though it will initially cost the town substantially more.
And if the town continues to fund 100% of employees’ health costs, the less expensive higher Deductible plans under the new system would cost even more – up to $479,000 for gold level coverage with an HRA, and even as much as $438,000 for the lowest level, bronze, with an HRA.
Responding to a question from Rich Werner, Terk said the board would discuss their next move with employees at a future public meeting.
In other matters, the board approved a job description for a new town administrator. The position is a change, in title at least, from the position of “administrative assistant” held by Nona Monis. Monis left last month to start her own business. Last week, the board appointed Jeanette Eckert to serve as interim administrative assistant.
The new job description clarifies the duties of the town administrator, which range from office management and budget preparation to coordinating with state and federal officials. Terk described the position as “halfway between an administrative assistant and a town manager,” and said the job description clarifies what the board is seeking in an administrator.
The board recently met with the Vermont League of Cities and Towns, which will be conducting the search for applicants. Terk said the VLCT would take the job description, suggest any changes the board might consider, and use the document to begin advertising the position.
Terk asked board members if they wanted to appoint a committee to do the initial screening and recommend top candidates. After considerable discussion on a committee’s role, the board agreed to seek candidates for a five-member committee that includes a selectboard member, a town employee, a member of the business community, and two “at large” community members. All must be Dover voters, and the board will also appoint alternates for the community positions.