The town and its employees have struck a deal that will allow Norwood to join the state's health insurance plan, a move that could save Norwood an estimated $1 million next year.
On Wednesday, employees voted to accept the provisions of the state's Group Insurance Commission that will allow the town to join the program for the next six years.
By law, 70 percent of a public employee committee, comprised of representatives from all collective bargaining units in town as well as a retiree representative, must approve the switch for it to happen. Employees this week gave that approval with every union endorsing the change.
General Manager John Carroll said yesterday, the town will save roughly $1 million in health insurance next year, but an exact figure is hard to pin down.
"A lot depends on how many people who are now served on plans other than the town's may come into the program," said Carroll. "But we feel this is going to work out well for the town and the employees."
Jody Smith, chairwoman of the employee committee, said she was thrilled with the spirit of cooperation among the unions and with the town and believes joining the GIC will benefit everyone.
"We're very excited about it because our health premiums have been going up double digits every year and this will stabilize that," said Smith. "It will also give employees a wider range of carriers to choose from, which is nice."
Health insurance has been eating up town revenues in recent years.
In 2005, the town changed its health insurance policy to stop the budgetary bleeding in which Norwood's health care costs increased from $3.1 million to $8.9 million in five years.
The increases prompted the town to move from being largely self-insured to getting a premium-based policy. The move worked, as the town's health insurance costs have only increased roughly $2 million since, topping off at $10.9 million in the current fiscal year.
Officials hope joining the GIC will shave $1 million off those costs next year and that the savings will carry forward into future years.
An August 2007 report issued by the Massachusetts Taxpayers Foundation and the Boston Municipal Research Bureau, estimated that cities and towns that join the state plan could save between 2.6 and 4.3 percent on health insurance costs. According to the report, the state plan costs less because it deals with a larger pool of employees and has greater negotiating power.
Carroll believes that power will result in continued savings for the town over the coming years.
"We're in a much better position (to save money under the state program) than we would have been going out on our own," said Carroll.
"It was a very, very long negotiating process, and there was some give and take on both sides," said Smith. "But in the end I think both sides absolutely win."
Daily News staff writer Brian Falla can be reached at 781-433-8339 or bfalla@cnc.com.
