Public Works employees and city reach contract agreement

Blue Cross throws last minute insurance rate curve

City Manager Eileen Cabanel said yesterday afternoon that a tentative agreement has been reached with the American Federation of State, County and Municipal Employees (AFSCME), Council 93, Local 534, which represents non-management employees of the Department of Public Works, on a three-year contract. The current collective bargaining agreement with the union expires on June 30.

Like the agreements with the Laconia Police Officers Association and State Employees Association (SEA), which the City Council approved last week, the AFSCME contract includes the swapping of a Anthem (Blue Choice) health insurance policy for a comparable plan offered by Harvard Pilgrim, increasing the employee contribution to the health insurance premium and applying the savings to annual cost-of-living adjustments (COLAs).

Last night, Cabanel informed Mayor Matt Lahey and the members of City Council that Anthem/Blue Cross — through the NH Municipal Association's Local Government Center (LGC) — may have thrown a late curve ball into the whole picture by finalizing renewal rates considerably lower than those projected.

Cabanel said she had just learned of the development a couple of hours before councilors were scheduled to meet in an evening budget work session and had not yet had time to fully analyze the numbers or develop a strategy for dealing with them. She did say that the 8.8-percent "guaranteed maximum" increase in premium rates for fiscal year 2007-2008 that had been provided by LGC earlier had apparently turned into an actual decrease.

"You know why they did it, and you know what will happen next year," Cabanel told councilors without having to clarify her suspicion that rates miraculously went down because LGC knew the city was determined to change underwriters in an effort to fund pay-raises for union employees.

Cabanel said the "guaranteed maximums" quoted by LGC in previous years have always turned out to be very close to the actual increases that came along later and therefore she had felt comfortable building a budget — and a union negotiating strategy — around those numbers.

On July 1 the Blue Cross/Blue Choice premiums were projected to increase from $7,935 to $8,567 for a single insured and from $21,425 to $23,131 for a family plan. The premiums for the Harvard Pilgrim point-of-service plan are $7,999 for a single insured and $21,716 for a family plan, slightly higher than the current cost but lower than the anticipated cost of Blue Choice.

The contract agreed to by all three unions also offers a less expensive HMO plan administered by Harvard Pilgrim at no cost to employees who choose to enroll in it.

Prior to getting the latest news from LGC, Cabanel projected that the city would trim $167,000 from the cost of health insurance in 2007-2008 if all municipal employees, excluding employees of the School District, switch to the Harvard Pilgrim plan. In addition, the city will save another $40,000 if members of all four municipal unions agree to increase their premium contributions to 7.5-percent this year and 10-percent next year.

The other terms of the three-year contract with the Public Works employees tracks those of the other agreements. The contract awards annual COLAs of three-percent in each of first two years and two percent in the third. Employees, who currently contribute five-percent toward their health insurance premiums, will pay 7.5-percent in the first year of the contract and 10-percent in both the remaining years. Finally, the prescription medication program, under which employees pay the first $10, $20 or $30 for generic, preferred and brand-name drugs, has been changed to eliminate the co-pay for generic drugs altogether.

Of the four unions representing municipal employees, only the Laconia Professional Firefighters have yet to reach agreement on the terms of a new contract. Meanwhile, the Laconia Education Association, which represents the teachers, rejected a contract offered by the School Board and negotiations have yet to resume.

(Ed Engler contributed to this report.)