2015-05-28 / Front Page

Retirees Agreement Reached

By Barry Bridges

After a year of negotiations, Newport school leaders have reached an agreement with the district's 65-and-over retirees to transfer their health care coverage to a plan that will provide the same benefits for less cost.

Providence labor attorney Aubrey Lombardo represented the schools in the process, which began last June as part of an effort to control outlier costs that have contributed to the system's structural deficits for several years. At a School Committee meeting on Tuesday, May 26, she explained that the agreement will move retirees and eligible dependents from Blue Cross HealthMate Coast-to- Coast to a package consisting of Medicare Part B, a supplemental Blue Cross plan, and a health reimbursement account.

Committee Chair Jo Eva Gaines commented on the successful resolution of the matter. “This was a long time coming. I want to thank the retirees, because I know the road was long and arduous.”

Gaines later told Newport This Week that the result is a mutually satisfying win-win for all involved. “We exhausted every option, and the fact that it took a year means that it wasn’t rushed,” she explained. “We were able to answer all of their questions about coverage, which will be the same, if not better. In the end, they wanted to spend more of our resources on our kids. That’s what they’ve been about their whole lives.”

According to school officials, retirees will enjoy comparable health benefits while $25,000 per month will be freed up for educational needs elsewhere. About 200 participants will be transferred into the new plan, which takes effect on June 1.

When talks began last summer, it was hoped that yearly savings of around $900,000 would be realized, but that prediction was reduced as negotiations moved forward. School leaders were nevertheless pleased at the prospect of more money in the coffers. “A quarter of a million to $300,000 [in annual savings] is still substantial,” said Vice Chair David Hanos.

In a telephone conversation, Newport Superintendent Colleen Jermain confirmed that the initial impetus behind the effort was to save money. “Our retiree costs are very high compared to other districts and contribute to budget problems, so it needed to be addressed. The results will be $25,000 per month now, but it could increase over time.”

Providing similar coverage to beneficiaries was also a primary goal throughout the process. In March, Jermain emphasized that the district wanted to offer a health plan of the same quality while saving money. “Contracts in the past guaranteed individuals that they would have life benefits,” she said at the time. “Instead of going into the classroom, $1,800 per student goes to retirees. That’s an outlier and it’s the largest in the state. It is something that is not sustainable, and if it continues the structural deficit that we already have will just continue to rise. With the other health care and prescription options that are available these days, there are comparable services at a lesser cost.”

Newport Schools Director of Human Resources Frances Eames reiterated the goal of continuity under Medicare and the supplemental plan. “The committee’s intent was to keep the retirees’ whole. They shouldn’t feel any difference in their actual benefits.”

In the rare situation where a condition is not covered but would have been under the previous insurance plan, the School Department has committed to paying the difference. “Such cases will be few and far between,” Eames reported.

But committee member Rebecca Bolan referenced that provision in Tuesday’s meeting, saying that its inclusion had turned her against the entire deal. “I can’t read the future, and I don’t want to open up the schools to liability,” she said.

Lombardo advised that the arrangement was a necessary compromise reached through lengthy negotiations. But she also noted that it will be binding on the parties once a court sanctions the agreement through a consent judgment.

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