Cohasset plan to reduce its $40M health insurance debt to 0 by 2045

“This problem is not a matter of cost, it’s a matter of promise. We have a promise that is larger than our budget. This (plan) gives us the capability of making some clear decisions,” Selectman Steve Gaumer said.

Cohasset Selectmen voted 5-0 to notify all active and retired teachers of their intention to consider OPEB (Other Post Employment Benefits) committee’s health insurance recommendations by migrating all retired teachers from the GIC plan to the MIIA plans.

Barbara Cataldo, Superintendent of Cohasset schools said “The Town will facilitate meetings between the retired teachers and representatives of MIIA to address concerns and questions. Additionally, a public meeting and an advisory vote by the retired teachers will be held prior the Board of Selectman’s final consideration of the move from GIC to MIIA

Timothy Davis, OPEB chair, said the Plan would result in significant cost reductions without negatively impacting the benefits of retirees.

The OPEB schedule was developed by the OPBE committee consisting of Davis, Carl Forsythe and Jason Soules, Selectman Steve Gaumer, Advisory Chair Peter Pescatore, School committeeman Paul J Shubert, the Town and School finance departments, John Chapman, former member of the committee,…with many thanks to the Hingham Town Administrator Ted Alexiades.

Selectmen voted to dedicate all cost reductions to the OPEB Trust Fund. (OPEB Trust Funds offset OPEB Liability.) This will require a vote of Annual Town Meeting.

Mitigation would be handled on a case-by-case basis, the intent being to minimize the economic impact while still accomplishing the goal of reducing OPEB debt.

Currently, retired teachers pay 15% of their medical insurance that is an unfunded mandate by the State. Active town employees and retired town retirees are paying 50% of their health care costs. Selectmen can mandate the plan for retired teachers, but the school committee needs to negotiate any changes with full-time teachers.accrued liabilities

 

If the Town of Cohasset doesn’t adopt this plan, its $40 million (OPEB) debt will outstrip all Town revenue in 2035. The Town is currently amassing debt at the rate of $2 million a year.

Davis said the plan would result in decreasing the unfunded OPEB liability of $40 million to $0 over 30 years.

Accordingly, medical insurance accounts for approximately 10% of the Town Budget and is growing at 5-8 percent (perhaps higher) while Town Revenues grow at 2 ½ to 3 percent a year.

“This problem is not a matter of cost, it’s a matter of promise. We have a promise that is larger than our budget. This (plan) gives us the capability of making some clear decisions,” Selectman Steve Gaumer said.

© Copyright 2015 Tanna K, All rights Reserved. Written For: Tinytown Unleashed
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