from the pages of the Massachusetts municipal Association;

Sections 21 through 23 were enacted to offer a process by which a municipality may modify health insurance benefits without engaging in the traditional bargaining process.


Faced with ever-increasing health insurance costs, municipal employers are searching for relief. Frustrated by attempts to implement changes through traditional collective bargaining, many cities and towns have used the statutory process provided by Sections 21 through 23 of Chapter 32B. Sections 21 through 23 were enacted as part of the 2011 municipal health insurance reform legislation to offer a process by which a municipality may modify health insurance benefts (aka “plan design”) without engaging in the traditional bargaining process. Sections 21 and 23 provide a procedure by which a municipality may transfer its subscribers to the Group Insurance Commission (GIC). Section 22 permits a governmental unit that has followed the procedures outlined in Section 21 to include in its health plans “copayments, deductibles, tiered provider network copayments and other cost-sharing plan design features that are no greater in dollar amount than the copayments, deductibles, tiered provider network payments and other cost-sharing plan design features” offered by the GIC in, as applicable, the non-Medicare or Medicare plan with the largest subscriber enrollment (i.e., the GIC “benchmark” plans). Presently, the GIC non-Medicare benchmark is the Tufts Navigator plan, while the GIC Medicare benchmark is the Unicare State Indemnity Plan/Medicare Extension OME. While many municipalities have decided to include in their plans all of the features (at the maximum dollar amounts) that Section 22 allows, a municipality may elect to include only certain of the allowed features and/or may include features at a lower dollar amount than the amounts in the benchmark plan. Under Section 23, a governmental unit may only transfer its subscribers to the GIC if it can demonstrate that the anticipated savings that it would realize would be at least 5 percent greater than the maximum possible savings that it could realize if it made the full plan design changes allowed by Section 22. As the GIC benchmark plans contain features that are not contained in most municipal plans (for example, an upfront deductible) and/or that are considerably higher in cost to subscribers than similar features in many municipal plans, adopting the GIC plan design features or transferring subscribers to the GIC can have a signifcant impact on a municipality’s health care costs. The Process Accept Sections 21 to 23: Section 21 sets out the procedures that a municipality must follow in order to implement the changes allowed by Sections 22 and 23. The frst step involves the acceptance of Chapter 32B, Sections 21 to 23. In a town, these sections are accepted by vote of the board of selectmen. In a city with a Plan D or Plan E charter, the sections are accepted by majority vote of the city council and approval by the manager. In any other city, the sections are accepted by majority vote of the city council and approval by the mayor. Prepare Implementation Notice: State regulations governing Sections 21 through 23, issued by the secretary of Administration and Finance, require that the governmental unit’s appropriate public authority (APA) prepare an Implementation Notice. (In a town, the APA is the board of selectmen; in a city, it is the mayor.) The Implementation Notice includes, among other things, information concerning the changes to cost-sharing features that the APA is proposing to make to health plans, the estimated premium savings that will be realized during the frst twelve months following implementation (including the analysis that the APA has generated to support those estimated savings), the percentage of those savings that the APA is proposing to share with subscribers, and the vehicles that the APA is proposing to use to share the savings.

posted by Jeff Bennett