To save money, Springfield's government is working towards taking township public employees off of their current health care provider and moving their coverage to the state plan. Officials say the move, first discussed in 2009 and recently voted on by the township committee, would save taxpayers well over $1 million.
Oxford Health currently covers Springfield's 137 public employees and 41 retirees with a plan that costs approximately $4 million annually. Along with pensions, it is the largest cost to the township budget. And, officials say, its cost is set to increase by 11 percent.
"We have the Rolls Royce of health care systems," Springfield Mayor Ziad Shehady said. "We just can't afford it anymore."
The state's health care system, which the Township Committee voted to pursue at their August meeting, is far less expensive than the Oxford plan. But, officials have emphasized, it does not represent a serious drop in coverage.
"Oxford is a very good plan," Township Committee member Jerry Fernandez said. "The one they are going to get is still very good."
Under the state plan, Fernandez said, employees would continue to have a $10 co-pay for visits to doctors within the plan's network.
"It's Blue Cross/Blue Shield," Fernandez said. "Most people in the private sector wish they could have it."
One major change is that under the state plan, employees would be shifted into Medicare coverage when they turn 65. Under the current agreement, Fernandez said, retired employees would stay on the township plan even as they moved out of the network's geographic range.
Public employee unions expressed a mix of resignation and optimism about the switch.
"We've never been close minded to it," Springfield Firemen's Mutual Benevolent Association president Joseph Popolo said of moving to the state's healthcare plan. "We are open to helping the taxpayers with the cost of healthcare."
He added: "it's a comparable plan to what we have now."
Between 2009 and 2010, Springfield lost $451,000 in state aid. Like municipalities throughout the state, the township is dealing with increasingly scarce resources to cover increasing costs.
In the past, Springfield's government hired an insurance broker to strike deals with insurance companies. The choices were limited by Springfield's size, with many insurers declining to work with a workforce in a town as small as Springfield.
"Last year, we spent $1.2 million on retirees," Fernandez said.
Entering into the state program would get rid of the need for an insurance broker and the need to pay the broker's three percent commission—$120,000 for a $4 million deal.
Officials met with Springfield public employees unions in a closed-door meeting on Wednesday, Aug. 18. A second meeting is set for Sept 14.