Beginning next year, town employees and retirees will be enrolled in the state’s Group Insurance Commission, a move that officials say could save Arlington nearly $4 million per year in health care costs.
In a statement, Arlington officials said 25 percent of savings from the first year of the program will be used to offset costs to employees and retirees on the plan. These funds will fund a health reimbursement account to offset the highest co-pays in the state insurance plan, as well as provide a subsidy of Medicare Part B premium for retirees for two years.
Once the funds for cost offsetting run out, Arlington will continue to pump $200,000 per year into the employee mitigation fund.
Town Manager Brian Sullivan, who pushed for the move, said the town had projected $2 million in savings to come from the program. The new agreement, Sullivan said, could extend Arlington’s commitment to not push for another from three years to four or five years.
Union and town officials said Tuesday they reached the agreement to enroll town employees on the state plan after two months of negotiations.
The new insurance system goes into effect beginning Jan. 1, 2012.