HAVERHILL — About 2,800 city and school workers, as well as retirees and elected officials who receive city health insurance, will share $1.65 million in compensation for Haverhill switching them to new health care plans, officials said.
In addition to receiving compensation checks, the workers will also save on the monthly cost of insurance for themselves and their families.
Haverhill expects to save $3.8 million annually as a result of new health care plans the city recently negotiated with Blue Cross Blue Shield, Mayor James Fiorentini said. By law, workers affected by the switch must receive 25 percent of the city’s savings — $950,000 in this case.
According to a new state health insurance law, communities are allowed to put workers and retirees into the state health care system or a similar plan without their consent. The city’s workers and retirees chose a similar plan over the state plan, the mayor said.
The first batch of checks will be sent to workers and retirees next September, with another round of checks to follow in September 2015, the mayor said. He said he could not estimate how much those checks will be for.
The City Council approved the mayor’s agreement with the city’s unions and retirees this week, and set aside $131,000 to bolster the health care mitigation fund ahead of the payments. Another $600,000 is already in the fund, set aside as mitigation for previous changes to workers’ and retirees’ health care plans that required them to pay more for coverage. The $1.65 million that workers and retirees will share in compensation comes from the $600,000 plus the $131,000 and $950,000 from the city’s health care cost savings.
“All our workers wanted to stay in our Blue Cross-Blue Shield plan rather than join the GIC (state insurance system),” Fiorentini said. “We eventually convinced Blue Cross Blue Shield to give us a new plan that is better than the GIC and also better than the plan they are currently giving us.”