Letter: Town, educators win with health plan
In December 2014, the Fairfield RTM rejected a negotiated contract between the Fairfield School Administrators Association and the Board of Education largely based on a health insurance plan it believed was too costly, a prefered provider organization (PPO) plan with co-pays. Earlier in December, the RTM had approved a teachers' contract with the same co-pay design.
The RTM thought at the time that a high-deductible health plan with a health-savings account would save the town more money. As compared with a traditional PPO plan, with some exceptions, high dedutible/health savings plans require the employee to pay a deductible up front before the insurance plan covers medical services.
On March 19, the RTM, following a costly arbitration process, approved the exact same contract previously rejected.
Who won this battle? The answer is everyone: the taxpayers, the RTM and the Fairfield school administrators and teachers.
Co-pay plans sometimes can be can be more cost effective than high-deductible plans, and that is the case in Fairfield. The key is determining which plan better encourages appropriate use of health care services while minimizing costs to the town.
During the teachers contract negotiations, I served as the lead negotiator for health insurance. The Board of Education used health insurance experts from Aon and Milliman. Together, we analyzed the industry standard for high-deductible plans. When it became clear that there were little, if any, cost savings, we examined the high-deductible/health savings account model, which would shift greater costs onto the teachers.
In the end, both sides unanimously agreed that the PPO plan that eventually was adopted was the best choice for the town, the Board of Education and the teachers. It saved the town millions of dollars over a three-year period versus the current PPO plan and any of the reasonable high-deductibe/health savings account plans. It also allowed employees to continue with a program with which they were familiar. Overall, it was a model win-win solution.
Moving forward, the teachers and the BOE recognize that the rising cost of healthcare remains a serious concern. We have committed to getting together a full year before the most recent contract is due to expire to review our options.
By then, a presidential and congressional election will have taken place, and the health insurance industry will have had an opportunity to react to changes in the marketplace. Until then, the town can rest assured that the BOE, the teachers and school administrators arrived at the most cost effective, appropriately designed health plan for the town and their employees.
Bob Smoler, president
The writer is a former chief executive officer of Oxford Health Plans-NY.