Brockton, union deal saves $28m on health costs

The new health insurance agreement that cuts spending by $28 million over four years demonstrates the good relationship between the city of Brockton and its 17 public employee unions. But critics say the city could have saved more if it had taken advantage of a new state law that increases communities’ ability to set health benefits.

The 2011 Municipal Health Insurance Reform Act gives cities and towns the option of changing the health care plans of public employee unions legislatively, without traditional collective bargaining.

Early this year, Mayor Linda Balzotti recommended that Brockton adopt that act. But the City Council soundly rejected it in April, making Brockton one of four municipalities to opt out.

The pact signed a week ago by Balzotti and the coalition of union leaders — from police to administrative services — preserves employee bargaining rights and cuts the $49 million-a-year health insurance account by $6.7 million in the first year and $28 million over four years.

If approved by the City Council, the plan kicks in on Jan. 1, 2013, for retirees and July 1 for employees. The terms include such things as higher copayments and varying levels of hospital copayments, depending on the classification of the hospital. As under the current arrangement, beneficiaries would not have to pay deductibles, officials said.

“This agreement demonstrates that meaningful savings can be achieved through collective bargaining,” said Kimberly Gibson, president of the Brockton Education Association. “If we can do this in Brockton with such a diverse group of unions, we can do it anywhere.”

William Healy, who heads up the Brockton Police Association, agreed.

“This agreement is good for the taxpayers and fair to employees and retirees,” he said.

After the deal was reached, Balzotti said her original recommendation to accept the 2011 state law provided the impetus to seriously examine health care costs, and ultimately led to an accord that benefits everyone.

“We are all happy that we were able to achieve significant savings and protect our employees’ bargaining rights at the same time,’’ Balzotti said. “In addition, the structure of the agreement provides flexibility in deciding in the future whether we all are best served by continuing with coalition bargaining or utilizing some other method of determining health insurance coverage.”

Brockton personnel director Maureen Cruise said she was as happy as everyone else that the two sides agreed to reduce health insurance costs. But, she said, “we have to get it through the City Council before we can start saving money.”

The reality, she said, is that retirees lost six months of savings because the city didn’t follow the lead of other communities, which adopted a plan similar to the one provided to state employees.

Similarly, current employees, both union and otherwise, have lost a full year of savings, she said.

City Councilor at Large Thomas Brophy said he is thrilled at the resolution, as well as his panel’s role in it, and said it should set an example to other communities. The council is scheduled to discuss the agreement Thursday, and could approve it then.

“The City Council handed the ball to the mayor and the unions, and they scored a touchdown,’’ Brophy said. He said the pact’s term will determine whether it was a good compromise that allowed unions to make decisions “rather than have things forced down their throats.”

Those who criticized the City Council for rejecting the 2011 law owe it an apology, he said.

Michael Widmer, the director of the Massachusetts Taxpayers Foundation, was one of those critics, but no apologies were forthcoming. Like Cruise, Widmer said the savings are significant, but if the city had adopted the Municipal Health Insurance Law early this year, when the discussion took place, it would have already been saving money.

“Their approach has left money on the table that wasn’t realized,” Widmer said.

Given the current economic climate, a community needs to save as much as possible on health care costs, Widmer said. But the real concern, he said, is the length of Brockton’s health care contract in case it doesn’t work out well.

“They are locked in for four years. That’s a long time,” he said.

According to Widmer, a little more than a year into the application of the new law, total savings for cities and towns statewide had originally been estimated at $100 million, but are closer to $200 million. “It is a huge success,’’ he said.

Widmer added that because officials chose not to override collective bargaining, union members could conceivably try to get some of the savings back in negotiations for compensation in other areas during contract talks.

Six of Brockton’s school-related unions had previously settled on complete contracts, but  negotiations on the health benefits were reopened by the 2011 law. If the new deal is approved, those contracts would again be complete.

But the city still needs to negotiate agreements with its 11 other unions, which have been working without contracts since 2010.

Once the process for accepting the health insurance portion is finalized, city officials and unions will go back to the table to discuss all other contract terms.