TR-2011-23 M.G.L. CHAPTER 32B SECTION 18 (RETIREES) — — - —- �r�l ova ► .C��.fi rep) -__ -- —�
Town of Agawam
Mayor Richard A. Cohen
June 15, 2011
Council President Donald M. Rheault
36 Main Street
Agawam, MA 01001
Re: TR-2011-23 ------
Dear Councilor Rheault: .. ....
-;ebtitl6d --:Vassa� us'
Please withdraw TR�2011 23.-'- Ad6pting h etts. General Law
Chapter 3213, Section 18."
While.M.G.L. 32 B, s.-A �iay.save ihO'--.-T-6w'nI6f Ag�wam m'dni�y irf fh.&"t��Aerrn adopting, M.G.L.
ch. 32B s. 18A Would make'rnorci fiskil 'sensiaas-lr%4buld save mone,y in.the.,ldhg term.',Furthermore,
section 18 would require curr6ht.refirees.,tjp' rri6ke'c angesAwt 6#7)n ra nce;cove rage-that they may
.�riy costs associated with the
feel uncomfortable doing. vAdditiortall�,�i-6---If- 'Wri'WIIV-aotu� av I aly
�5600ri,ig. Section 18A would only.aif&6relfi�eie's'l Who retire after
change in coverage required 66'de.
the adoption of TR-2011-17 without,.aii�*J-ij ---rh6r-efore.;L'.I.-im�-�onf.ideht that'adopting section
18A makes economic sense'rat ilhiiflmL�..`,
Sincerely,
C)
Richard A. Cohen
>C-)
Mayor F
>r—
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36 Main Street,Agawam, MA 01001 Tel: (413) 786-0400 ext. 200 Fix: (413) 786-9927
—Tft a U
Section 18. In a governmental unit which has accepted the provisions of section ten and which
accepts the provisions of this section, all retirees, their spouses and dependents insured or eligible
to be insured under this chapter, if enrolled in medicare part A at no cost to the retiree, spouse or
dependents or eligible for coverage thereunder at no cost to the retiree, spouse or dependents, shall
be required to transfer to a medicare extension plan offered by the governmental unit under section
eleven C or section sixteen; provided, that benefits under said plan and medicare part A and part B
together shall be of comparable actuarial value to those under the retiree's existing coverage;
provided, further, that retirees or spouse, who has a dependent who is not enrolled or eligible to be
enrolled in Medicare part A at no cost shall not be required to transfer to a Medicare extension plan
if a transfer requires the retiree or spouse to continue the existing family coverage for the
dependent in a plan other than a Medicare extension plan offered by the governmental unit, Each
retiree shall provide the governmental unit, in such form as the governmental unit shall prescribe,
such information as is necessary to transfer to a medicare extension plan. If a retiree does not
submit the information required, he shall no longer be eligible for his existing health coverage. The
governmental unit may from time to time request from any retiree, a retiree's spouse and
dependents, proof certified by the federal government of their eligibility or ineligibility for medicare
part A and part B coverage. The governmental unit shall pay any medicare part B premium penalty
assessed by the federal government on said retirees, spouses and dependents as a result of
enrollment in medicare part B at the time of transfer into the medicare health benefits supplement
plan.
This section shall take effect In a county, except Worcester county, city, town or district upon its
acceptance In the following manner:— In a county by vote of the county commissioners; in a city
having a Plan D or Plan E charter by a majority vote of Its city council; in any other city by vote of
its city council, approved by the mayor; In a district, except as hereinafter provided, by vote of the
registered voters of the district at a district meeting; in a regional school district by vote of the
regional district school committee; and in a town either by vote of the town at a town meeting or,
by a majority of affirmative votes cast in answer to the following question which shall be printed
upon the official ballot to be used at an election of said town:— "Shall the town require that all
retirees, their spouses and dependents who are enrolled in Medicare Part A at no cost to a retiree,
their spouse or dependents, or eligible for coverage thereunder at no cost to a retiree, their spouse
or dependents, be required to enroll in a medicare health benefits supplement plan offered by the
owa?".
Section 18A. In a governmental unit that has accepted section 10 and that accepts this section, all
retirees, their spouses and dependents insured or eligible to be insured under this chapter, if
enrolled in Medicare Part A at no cost to the retiree, spouse or dependents or eligible for coverage
thereunder at no cost to the retiree, spouse or dependents, shall be required to transfer to a
Medicare extension plan offered by the governmental unit under section I IC or section 16,
provided, that the benefits under the plan and Medicare Part A and Part B together shall be of
comparable actuarial value to those under the retiree's existing coverage; provided, however, that a
retiree or spouse who has a dependent who is not enrolled or eligible to be enrolled in Medicare Part
A at no cost shall not be required to transfer to a Medicare extension plan if a transfer requires the
retiree or spouse to continue the existing family coverage for the dependent in a plan other than a
Medicare extension plan offered by the governmental unit. Each retiree shall provide the
governmental unit, in such form as the governmental unit shall prescribe, such information as is
necessary to transfer to a Medicare extension plan. If a retiree does not submit the information
required, he shall no longer be eligible for his existing health coverage. The governmental unit may
from time to time request from a retiree, a retiree's spouse or a retiree's dependent, proof, certified
by the federal government, of eligibility or ineligibility for Medicare Part A and Part 8 coverage. The
governmental unit shall pay any Medicare Part B premium penalty assessed by the federal
government on the retiree, spouse or dependent as a result of enrollment in Medicare Part B at the
time of transfer. For the purpose of this paragraph, "retiree"shall mean a person who retires after
the acceptance of this section by a governmental unit.
A retiree who retires prior to the acceptance of this section by a governmental unit, his spouse and
dependent shall continue to be eligible for benefits provided under this chapter, but may opt to
transfer to a Medicare extension plan offered by the governmental unit under section 11C or section
16, thereby becoming ineligible to participate in any other group health insurance benefits available
to active employees under this chapter.
This section shall take effect in a county, except Worcester county, city, town or district upon its
acceptance in the following manner: In a county, by vote of the county commissioners; in a city
having a Plan D or Plan E charter,'by a majority vote of its city council; in any other city, by vote of
its city council and approval by the mayor; in a district, except as hereinafter provided, by vote of
the registered voters of the district at a district meeting; in a regional school district, by vote of the
regional district school committee; and in a town, either by vote of the town at a town meeting or,
by a majority of affirmative votes cast in answer to the following question which shall be printed
upon the official ballot to be used at an election of said town - "Shall the town require that all
retirees, who retire after the acceptance of this section, their spouses and dependents who are
enrolled in Medicare Part A at no cost to a retiree, their spouse or dependents, or eligible for
coverage thereunder at no cost to a retiree, his spouse or dependents, be required to enroll in a
111-ediovre-�e—afth benefits supplement Ian offered bv the town?".
TOWN OF AGAWAM
� V 01%
MEMORANDUM
0
To: City Councillor Robert A, Magovern
CC: Members of the City Council
Mayor Richard A. Cohen .06
From: Laurel Placzek
Date: May 3, 2011
Subject: TR-2011-23 - A Resolution Adopting MGL Chapter 32B, § 18
Here is some additional information in regard to the adoption of MGL Ch.3213 §18. Presently,
there are 168 Medicare eligible retirees over the age of 65, Of these eligible retirees, 33 Town
retirees and 64 School retirees are not presently on Medicare. For every year a retiree is
eligible for,Medicare and does not enroll in Medicare Part B, the Town will incur a 10%
penalty. The penalty amount will increase every year that retirees are not on Medicare by
10% per year and by the penalty for any new eligible retiree not on Medicare.
The potential savings for the town in Fiscal Year 2012 if MGL Ch. 32B § 18 is adopted is
$309,319. The following is an analysis of the insurance premium savings and the penalty to be
paid by the Town:
Current Potential Medex 3 Town Potential Town
Town Share Medicare B Town Share Total Savings Net
Annual Town Costs of Premium Town Penalty of Premium Cost of Penalty
Town Retirees 270,435.72 25,895.76 130,159.92 . 156,055,68. 114,380.04
School Retirees 477,003.60 60,515.76 221,548.80 282,064.56 194,939.04
Total 747,439.32 1 86,471.52 351,708.72 438,120.24 309.319.08
The adoption of MGL Ch. 32B § will result in additional monthly costs to the retirees not
presently on Medicare of$169.41 for individuals or $250.46 for family plans.
Current HMO Medicare Plan Additional
Retiree Retiree Share of Premiums Monthly
Premiums Medicare B Medex 3 Total Premium
,Individual 176.77 , 115.40 230,78 346.18 169.41
IFamily 1 441.901 230.80 461.561 692.36 250.461
If you r equire any additional information regarding this matter, please contact me.
INTEROFFICE MEMORANDUM
TO: FULL COUNCIL
FROM: DONALD RHEAULT, COUNCIL PRESIDENT
SUBJECT: TR-2011-23
DATE: MAY 25 2011
Because of the importance of the first item of agenda (TR-2011-23
Resolution regarding Medicare) please make every effort to attend tonight's
meeting. Those in conflict must not enter dialogue and declare that they are
going to abstain up front. Also because of these conflicts the Ordinance
Meeting scheduled for 6:15 tonight is hereby cancelled,
If you have any questions please call Don prior to the meeting.
cc: Mayor, Solicitor
lf,-2011- 2Z
A RESOLUTION ADOPTING MASSACHUSETTS GENERAL LAW CHAPTER 32B,SECTION 18
(SPONSORED BY: MAYOR RICHARD A. COHEN)
WHEREAS, Massachusetts General Law 32B, Section 18 (M.G.L. c. 32B, §18) provides that municipal
retirees, their spouses and dependents who are eligible, to enroll in Medicare Part A, enroll in a
Medicare health plan.
WHEREAS, Massachusetts General Law 32B,Section 18 is subject to local acceptance; and
WHEREAS, Accepting Massachusetts General Law 32B, Section 18 is an important tool in the
management of Agawam's insurance program; and
WHEREAS, Accepting Massachusetts General Law 32B, Section 18 would shift the costs to the Federal
Medicare Program; and '
WHEREAS, Massachusetts General Law 32B, Section 18 is a method of countering the rising costs of
health insurance for municipalities, recommended by the Massachusetts Department of Revenue; and
WHEREAS, The Town of Agawam has a fiduciary duty to the taxpayers to control spending for health
insurance; and
WHEREAS, Massachusetts General Law 32B, Section 18 is being adopted and accepted by many
communities throughout the Commonwealth of Massachusetts; and
WHEREAS, Governor Deval Patrick is supporting legislation which would mandate cities and towns to
follow the provisions of Massachusetts General Law 32B, Section 18.
NOW THEREFORE, BE IT RESOLVED BY THE AGAWAM TOWN COUNCIL that Massachusetts General Law
Chapter 32B, Section 18 is hereby accepted.
DATED THIS DAY OF 12011.
PER ORDER OF THE AGAWAM CITY COUNCIL
D Donald M. Rhea:u t, President
o na
'd M' Rhe!�u t. Pre-,i dent
S
AP RO ED JASFORM AND LEGALITY
C),
V i c t
.Giosc Citv So I i c ito
n en F.boscia, City Solicitor
' General Laws: CHAPTER 32B, Section 18 Page l of
� - Print
/ PART I ADMINISTRATION Or THE GOVERNMENT
| |
C h 18
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| SERVICE,IV CIVIL RETIREMENTS AND
' CHAPTER 32B CONTRIBUTORY GROUP GENERAL On BLANKET INSURANCE FOR PERSONS IN THE !
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| A��YLC�E OF COUNTIES, TOWNS AND DISTRICTS, AND THEIR DEPENDENTS
| Section 18 Medicarei |ans; mandatory transfer f retirees
'
Section 18. In a governmental unit which has accepted the provisions of section ten and which accepts the pnnv|o|nns
of this section, all retirees, their spouses and dependents Insured or eligible to be Insured under this chapter, if
en,nUmg In medicare part at no cost to the naUnoe, spouse or dependents or eligible for coverage thereunder at no
cost to the retiree, spouse or dependents, shall be required tu transfer tw m Medicare extension plan offered by the
governmental unit under section eleven C or section sixteen; provided, that benefits under said plan and medicare
part A and part B together shall be of comparable actuarial value to those under the ,eUnam's existing coverage;
provided, further, that re¢|nams or spouse, who has a dependent who Is not enrolled or eligible to be enrolled In
Medicare part A at no cost shall not be required to transfer to a Medicare extension plan if transfer requires the
retiree or spouse to continue the existing family coverage for the dependent in a plan other than a Medicare extension
plan offered by the governmental unit. Each retiree shall provide the governmental unit, in such form as the
governmental unit shall prescribe, such information as is necessary tu transfer to a Medicare extension plan. If
vaUrme does not submit the information required, he shall no longer be mUg|h|e for his existing health cuverage. The
governmental unit may from time to time request from any retiree, a retiree's spouse and dependents, proof certified
by the federal government uftheir eligibility or Ineligibility for med|care part and part 8 coverage. The governmental
unit shall pay any medicare part s premium penalty assessed by the federal government on said retirees, spouses and
dependents asa result of enrollment in medicare part aat the time nf transfer into the Medicare health benefits
supplement plan.
This section shall take effect In a county, except Worcester county, city, town ur district upon Its acceptance |nthe
following monnen— In a county by vote of the county commissioners; In city having a Plan Du, Plan E charter hya
majority vote of its city council; In any other city by vote o[its city council, approved by the mayor; in a district,
except as hereinafter provided, by vote of the registered voters of the district otm district meeting; |naregional
school district by vote of the regional district school committee; and in a town either by vote of the town at a town
meeting or, by a majority uf affirmative votes cast in answer to the following question which shall he printed upon the
official ballot to be used at an election of said town:— "Shall the town require that all retirees, their spouses and
dependents who are enrolled in Medicare Part at no cost to a retiree, their spouse o,dependents, or eligible for
coverage thereunder at no cost to a naUnon, their spouse or dependents, be naqu|nad to enroll in a med|care health
benefits supplement plan offered by the tum/n7^.
httn://wapw.oma}egislotorc.gov/Lavva/ ]cnetal[avvo/Portl/TiticIV/Chaplec]2B/Stcti0o]8/Print 3/31/201 l
Massachusetts Depanment of Revenue Dksibn of local Se-vkes
AAw LeBovxVe,Cwrw"w Gerard D",Do"Cwyrhis�l Q,
.4
Bulletion
2006-07 B
To- City and Town Clerks
From: Frederick Kingsley, Bureau Chief
Municipal Data ManagemenVTechnical Assistance Bureau
Date: May 16, 2006
Subject: Notification of Acceptance, MGL Chapter 32B, §18
In recent years communities have experienced dramatic increases to their employee health
insurance costs. One option available to communities is MGL Chapter 32B, §18 which allows the
community to save money on retiree health insurance costs. Adopting this section allows a
community to shift a significant portion of its retiree health insurance costs to the federal Medicare
program.
This can be adopted locally by a majority vote of the city council in a city with a Plan D or Plan E
charter, or the council, with the approval of the mayor, in any other city. In towns, acceptance by
either a majority vote of town meeting or the electorate is required. Once adopted, Section 18
requires that all eligible retirees enroll in Medicare Part B.
If you would like additional information regarding the benefits of Section 18 of Chapter 32B the
Technical Assistance Section has prepared two "Best Practices in Municipal Finance" on the
subject. To view these click on the links below:
Saving Money of Retiree Health Insurance —
http://www.d Is.state.ma.us/md mstuf[Technica I Assistance/Best Practices/retireehealthins.htm
Other Post-employment Benefits —
http,//www.dIs.state.ma,us/mdmstuf/TechnicaI Assistance/Best Practices/opeb.htm
If your community has adopted Chapter 32B, §18, please fill out the attached Notification of
Acceptance form and fax it to the Municipal Databank at (617) 626-2330.
The&vision of LwAlSen�&responsift tbrowsot of andassistarxV to atrus and towns v ndm4ng eqtolabk pWMy taxation and eflicient fiscal=mXimm TheDivislon
mgtdanypLbtWwsM#tLfwwttomlGuidelffm dethilkV k9al and adiunistratrmpmedm)and Upe&Wetin(annaoxwAffits and UseUm1bawtion)for AX&DIrAWIS&ad
O#wrs interested Aq munic9al Anarre
Pbst Office Box 9569 Boston AM d?114 9569 r&617-6264300,Fax 6174*2330 htIpAvww&statedw us
(CityfTown)
Notification of Acceptance
General Laws Chapter 32B §18
The Commissioner of Revenue is hereby notified that the City/Town of
by an act of its legislative body on has accepted the
provisions of General Laws Chapter 32B §18.
(City/Town Clerk)
(Date)
Please submit this.form to:
Municipal Databank
PO Box 9569
Boston, MA 02114-9569
(617) 626-2330 (fax)
OFFICE OF THE GOVERNOR
COMMONWEALTH OF MASSACHUSETTS
STATEHOUSE * BOSTON, MA 02133
(617)725-4000
DEVAL L. PATRICK TIMOTHY P.MURRAY
GOVERNOR LIEUTENANT GOVERNOR
January 21, 2011
To the Honorable Senat6 and House of Representatives:
I am filing for your consideration a bill entitled "An Act Further
Strengthening the Commonwealth's Partnership with its
Municipalities."
This legislation provides cities and towns with additional tools
they need to respond to the present fiscal challenges by managing
their limited resources more efficiently.
First, the bill requires that, in time for fiscal year 2012, every
municipality must either join the Group Insurance Commission or
have a health insurance plan in place that will provide equivalent
savings. Labor will have a meaningful role in developing this plan.
Second, this legislation requires every city or town to move its
eligible retirees into Medicare. These two measures will save our
communities over $120 million.
Finally, this bill will remove the archaic property tax exemption
for telecommunications equipment. This step is worth an additional
$26 million for cities and towns.
These measures will help cities and towns weather the present
fiscal downturn, save hundreds of millions of dollars over time, and
take significant pressure off property taxes now and in the future.
In order to assure that municipalities have sufficient time to
secure new health insurance plans through the Group Insurance
Commission or otherwise, to enroll employees and their families in
time for fiscal year 2012, and to meet the March.31 Medicare
enrollInent deadline for their eligible retirees, it is-imperative to enact
this legislation as soon as possible and with an emergency preamble.
I therefore urge your prompt passage of this legislation.
'T4r CIT ammonfueaft4 ofmagoar4metts
IN THE YEAR TWO THOUSAND AND ELEVEN
AN ACT ]FURTHER STRENGTHINO THE COMMONWEALTH'S
PARTNERSHIP WITH ITS MUNICIPALITIES.
Mereas, The deferred operation of this act would tend to defeat its purpose, which is forthwith to
strengthen die commonwealth's partnership with its municipalities in the prmnt fiscal emergency,
therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the
public convenience.
Be it enacted by the Senate and House of RApresentafives in General Court assembled.and by the
authority of the same,oijollows:
MMMT.XXX
xxxxxxxxxx
TRANSFER OF ELIGIBLE MUNICIPAL RETIREES INTO MEDICARE
SECTION 1. Section 18 of chapter 32B of the General Laws is hereby repealed.
SECTION 2. Said chapter 32B of the General Laws is hereby amended by striking out section 18A,
and inserting in place thereof the following section:-
Section 18B. (a) All retirees, their spouses and dependents insured or eligible to be insured under this
chapter, if enrolled in Medicare Part A at no cost to the retiree, spouse or dependents or eligible for
coverage thereunder at no cost to the retiree, spouse or dependents, shall be required to transfer to a
Medicare health plan offered by the governmental unit under section I IC or section 16, if the benefits
NOTE,—Use ONE side of paper ONLY. DOUBLE SPACE, insert additional leaves, if necessary.
under the plan and Medicare Part A and Part B together shall be of comparable actuarial value to those
under the retiree's existing coverage, but a retiree or spouse who has a dependent who is not enrolled.
or eligible to be enrolled in Medicare Part A at no cost shall not be required to transfer to a Medicare
health plan if a transfer requires the retiree or spouse to continue the existing family coverage for the
dependent in a plan other than a Medicare health plan offered by the governmental unit.
(b) Each retiree shall provide the governmental unit, in such form as the governmental unit shall
prescribe, such information as is necessary to transfer to a Medicare health plan. If a retiree does not
submit the information required, lie shall no longer be eligible for his existing health coverage. The
governmental unit niay from time to time request from a retiree, a retiree's spouse or a retiree's
dependent, proof, certified by the federal government, of eligibility or ineligibility for Medicare Part A
and Part B coverage.
(c) The governmental unit shall pay any Medicare Part B premium penalty assessed by the federal
government on tile retiree, spouse or dependent as a result of enrollment in Medicare Part B at the time
of transfer.
REPEAL TELECOMMUNICATIONS MACHINERY EXEMPTION
SECTION 3. Section 5 of chapter 59 of the General Laws, as appearing in the 2008 Official Edition, is
hereby amended by inserting after the word "than", in line 230, die' following words:- a telephone or
telegraph corporation taxed -under section 52A of chapter 63 or.
2
SECTION 4. Said section 5 of said chapter 59, as so appearing, is hereby further amended by inserting
after the word s "tw o A", in line 233, the following words:- , other than a telephone or telegraph
corporation,.
SECTION 5. Clause Sixteenth of said section 5 of said chapter 59 is hereby further amended by
striking out paragraph (2), insetted by section 2 of chapter 173 of the acts of 2008, and inserting in
place thereof the following paragraph:-
(2) In the case of(a) a business corporation subject to tax under section 39 of chapter 63 that is not a
manufacturing corporation, or (b)a telephone or telegraph corporation subject to tax under section 52A
of chapter 63, all property owned'by the corporation other than the following:- real estate, poles,
underground conduits, wires and pipes, and machinery used in the conduct of the business, which term,
as used in this clause, shall not be considered to include stock in trade or any personal property directly
used in connection with dry cleaning or laundering processes or in the refrigeration of goods or in the
air-conditioning of premises or in any purchasing, selling, accounting or administrative function.
Notwithstanding the preceding sentence, a telephone or telegraph corporation shall be subject to
property tax assessment on machinery used in the conduct of its business and ]eased to it by a
corporation that is not a telephone or telegraph corporation.
MUNICIPAL HEALTH INSURANCE
SECTION 6. (a) Each municipality shall provide health insurance coverage to its subscribers either
through the group insurance commission or through other means with benefits of comparable actuarial
value to those provided by the group insurance commission.
3
(b) Notwithstanding chapter 32B of the General Laws or.any other general or special law to the
contrary, if a municipality's health insurance benefits do not comply with subsection (a), the chief
executive of the municipaility shall give notice to its public employee committee, established or which
shall be established under section 19 of said chapter 32B, of its intention to enter into negotiations to
provide health insurance coverage to its subscribers and to enter into a written agreement within a
period prescribed by regulations to provide such coverage,
(c) If no agreement is reached within the prescribed period, the municipality shall transfer its
subscribers to the group insurance commission or provide health insurance coverage to its subscribers
in a manner prescribed by regulations and which complies with subsection (a).
(d) The secretary of administration and finance, in consultation with the secretary of labor and
workforce development, shall adopt regulations to carry out this section, including but not limited to
regulations defining comparable actuarial value, setting forth deadlines for prompt and reasonable
compliance with this section to ensure compliant coverage in fiscal year 2012, detailing the procedure
by which the municipality-shall provide health insurance coverage under this section, and determining
the extent to which reduced costs to the municipality resulting from adoption of coverage under this
section shall be shared with the municipality's empl oyees.
4