Reducing runaway cost for city paid for health insurance

Health insurance costs for cities and towns is rising so high so fast that there is the general understanding among those in leadership positions that maintaining this into the future is unsustainable.

Employee unions have fought the cities and towns to maintain the health insurance situation as it is, which many leaders believe is a losing battle as in the end the cities and town will be forced to reduce what they pay for city employee health insurance.

In Chelsea, city employee health insurance has risen dramatically.

It is the single fastest growing cost in city government consistently during the past decade, according to city manager Jay Ash.

Even with employees paying more for their coverage, health insurance has gone from 5% of the Chelsea city budget in 2000 to 13% of our budget in 2010.

Health insurance coverage costs for the city are north of $10 million and are rising at a terrific rate.

Like the remainder of the cities and towns in the Commonwealth, Chelsea is awaiting a state initiative to give the cities and towns relief on health insurance.

This past year, the city offered a plan that gives employees up to $3000 to get off of city paid for health insurance or for new employees not to accept it.

In 2011, the city will pay out $14,000 in incentives, but will save nearly $170,000 in health insurance costs.

“This is one of the many ways we’ve needed to be creative,” said Ash.

“State law can be so constricting,”he said.

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