Orange reaps savings on health care costs

• Email
• Print
• Comments (0)

ORANGE — Last year, selectmen voted to switch health plans and Orange is now reaping the benefit of that decision with savings of about $340,000 in annual health care costs for employees and retirees.

“It’s a real win for us,” said Kathy Reinig, “as it releases money we can use for better purposes.”

Selectmen voted last spring to adopt the legislation that allowed cities and towns to change health insurance plans without negotiating existing union contracts. The initiative was designed to provide relief to communities feeling the squeeze of escalating health care costs.

Reinig said a group of town and school employees and retirees was set up to help negotiate the move.

“It was the group of employees who found this really great deal in health care plans” that resulted in substantially more savings than officials believed they could realize through the transition.

The employees researched various plans and discovered town employees are eligible for coverage through the Group Insurance Commission, which provides health insurance coverage for all state workers.

The vast pool of state employees on the plan allows GIC to offer the lowest available rates.

According to Reinig, the monthly bills for the new plan are nearly $17,000 less than bills the town paid on the old plan. But the real savings are much higher, she said, as the old bills don’t take into account the yearly rate hikes of the previous plan which averaged 12 percent to 15 percent. Yearly rate hikes for GIC are a fraction of that amount, 3 percent to 5 percent.

Reinig said that about $200,000 of the savings are in the school budget, and will be reallocated for other educational expenses.

The remaining savings in the town budget will offset some unforeseen expenses, such as the review of all the town’s property assessments, which could be as high as $50,000. The rest of the money can be used to help pay for needs identified in the town such as the senior center, capital building plans, she said.

She added officials will be looking to invest the funds in “things that will have a return in the future … that will help us be more efficient and effective” such as the recent hiring and training of two full-time police officers, which she said will strengthen police protection and reduce costly overtime expenses.