New Milford could save $2.5 million with health insurance plan switch

Photo of Katrina Koerting

NEW MILFORD — Town and school employees could soon switch to the state health insurance plan in a move that officials estimate could save thousands, if not millions of dollars.

New Milford currently has a self-funded plan for the school and town employees but as costs continue to rise, officials are mulling a switch to the state partnership plan.

On paper, the move will save about $339,000 in next year’s budget, but Mayor Pete Bass said the actual savings is closer to $2.5 million because by switching plans the town would avoid paying the $2.2 million, or 17 percent increase, expected for next year under the current plan.

Several officials said the health care increases were among the biggest budget drivers.

“This town is in one of the most cost-effective plans right now,” Arch Henderson, New Milford’s health insurance consultant told the school board, finance board and Town Council at a recent joint meeting. “But the state partnership plan is cheaper so that’s why we’re looking at it.”

He added the bulk of New Milford’s costs are in the claims.

Henderson said a lot of towns are now part of the state plan and the larger pool helps keep the costs down.

The self-funded plan was the cheaper option until last year when the state option became about $420,000 cheaper compared to New Milford’s actual costs, according to Henderson’s presentation.

All three boards unanimously approved a memorandum of understanding that allows them to negotiate the plan with their respective unions. The hope is it will be signed off on soon so that they can enter it in time for the next fiscal year.

“This is probably the biggest no brainer I’ve seen since I was elected,” said Councilman Tom Esposito.

At least 75 percent of the 586 employees will have to agree to the state plan for New Milford to make the switch.

Henderson said it’s better to have all of them accept though.

“We want to be one big group,” he said.

Bass said that the plan not only saves money, but also expands coverage for a “wide swath of employees.”

The state plan also has a wellness component that requires preventive health screenings for certain ages and penalizes those who don’t complete them.

Interim Superintendent of Schools Stephen Tracy said he was on the plan for a bit and described the wellness requirements as sensible.

“They’re trying to get us to be doing what we should be doing,” he said.

School board member Tammy McInerney, who was also on the plan, said the insurance companies give enough notice so the screenings can be completed.

The memorandum of understanding approved also includes an exit strategy, which would use the internal reserve fund.

“The MOU is well written and puts escape clauses in there if something should go wrong,” said school board member Joseph Failla.

One of the concerns raised about the plan was making sure the secretarial union doesn’t have to pay more because its year runs with the calendar and not along the July to June schedule the other unions have. The union president said she was willing to work with the school officials so that it could be phased in.

School Board Chairman David Lawson said they’ve been reviewing the switch for a year now and considering the new plan.

“I’m very proud of it,” he said.

Bass added, “It’s a great benefit for the town.”