NAUGATUCK — Two top municipal officials say the school board’s proposal to revamp the school employees’ health insurance plan will not achieve any savings to combat the school system’s projected $2 million budget deficit.
Mayor Bob Mezzo and Wayne McAllister, borough controller and acting school business manager, say expert advice leads them to believe the proposed Health Reimbursement Account system, which the school board is pushing with hopes of saving $892,489 this year, is a bad idea.
They said the borough’s health insurance broker, Joseph A. Fields, a partner in CBC Kane Partners, told them the new plan would not save any money this year—it would actually cost Naugatuck more in the long run.
That’s because the school board has proposed to fund the entire deductible, $2,500 for singles and $5,000 for family plans. According to Mezzo, Fields said that will not lower the rate at which employees file health insurance claims.
“The consultant said there are two ways to save money,” Mezzo said. “One is to require more [deductible] costs from employees, and the other is to provide an incentive for the employees to cut back on health insurance claims. This does neither.”
Mezzo said Fields is an expert with an impressive resume. Fields has taught insurance and finance classes at the University of Georgia, Penn State and the University of Connecticut for more than 20 years and has acted as an expert witness in more than 200 insurance cases in 20 states, including two that were heard by the U.S. Supreme Court.
The school board, which received its new healthcare proposal from its insurance broker, USI Connecticut, believes the health insurance plan will save money because the funds only need to be paid when a claim is incurred, and unused funds can be rolled over from year to year. The board believes the proposal is a win-win for employee groups, which must agree to the new plan, and the school board.
Board Chairwoman Kathleen Donovan said she believes the board’s insurance plan is solid and noted it was drafted by experts. She said she has yet to see any documentation from McAllister that indicates the proposal will not save money.
“If someone provides us with some information, we will certainly look at it,” she said.
Even though the board plans to fund the entire deductible, Donovan said she does not believe the way people use their insurance will be much different from their normal utilization patterns.
“All of this information on savings was cross-referenced with Anthem [Blue Cross and Blue Shield insurance] to make sure there would be savings,” she said.
The board has proposed the health insurance piece as the major cost-saver in its $1.6 million plan to bridge the budget gap. The plan also calls for concessions from unions, and the board has given school unions until Dec. 14 to make a decision.
The largest school union, the Naugatuck Teachers’ League, says it will not vote on the insurance proposal until it reviews the plan with its own experts.
“It took the board six months to come up with this plan; they can give us more than two weeks,” said Charley Marenghi, vice president and spokesman of the NTL.
The NTL also wants the board to vote on the teachers’ proposal for $552,000 in concessions before the union will vote on the board’s proposal.