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October 23, 2013

Salem selectmen grapple with rising health cost

Town considers cheaper alternatives

SALEM — Town officials are seeking less expensive options as they debate how to deal with a 14.9 percent increase in health insurance costs.

But one of those options was rejected by selectmen Monday night after human resources director Molly McKean presented them with an insurance plan she said would cut the town’s expenses.

Selectmen voted, 4-1, to table the proposal. McKean said it would effectively kill the plan to seek additional employee health insurance coverage for next year through Legal Shield. Selectman Michael Lyons was opposed.

“If it’s tabled now, it’s not possible to put it into effect for 2014,” McKean said.

Selectmen decided to schedule a nonpublic session for Oct. 30 to discuss the plan further, offering McKean some hope the plan could be approved in time for next year.

The proposal would save the town thousands of dollars a year in insurance coverage and reap savings for employees as well, she said, but it would mean initially offering workers cash incentives to join.

The savings would depend on how many town employees opted for the plan, which does include high deductibles, she said.

Under one scenario, those who join the family plan could receive a $500 cash incentive and the town would contribute $3,000 a year to a health savings account. The $3,000 could be rolled over to the next year if not used to fund health care costs.

But Selectmen’s Chairman Everett McBride Jr. and Selectman Stephen Campbell were opposed to giving employees $500 to join the plan.

“Most of the benefit of the change seems to be going to the employees and a smaller share is going to the people who pay 85 percent of the cost,” Campbell said of taxpayers. “I can’t sell this to the people who are paying the taxes.”

Town Manager Keith Hickey said the town is considering less costly insurance options after offering a “Cadillac plan” to employees for years. He supported McKean’s proposal, telling selectmen that Salem would benefit in the long run.

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