To Drop Health Costs, Vt. Towns Weigh New Plan

08/24/11 9:22AM By Kirk Carapezza

As cities and towns across Vermont battle the rising cost of health insurance for their employees, the Vermont League of Cities and Towns is pushing a special program that's supposed to help municipalities lower it.

The program is supposed to be cheaper because the league has more leverage by covering more people.

Traditionally, the league's Health Trust contracted with a private insurance company for the coverage, but 15 percent of the league's members have opted out over the past three years because the average premium rate increased by between 7 and 20 percent.

Now, the league has reorganized its Health Trust program. Instead of limiting towns to one insurer, towns will have a choice of insurance companies.

Ken Canning is the director of risk management with the VLCT. It's his job to sell the plan. He says local government will get better prices on health insurance with more options.

"The money that Health Trust receives we use to pay our overhead and supply these programs and services to the membership," Canning says. "If there are any net assets left over, our board of directors will consider returning monies back to the towns in the form of contribution credits."

Towns that left the Health Trust program had to pay the VLCT an exit fee equivalent to one month's premium. Now, the VLCT is trying to lure them back by waiving that fee.

Four municipalities have already decided to rejoin, including the City of Barre.

In Swanton, the select board chose to leave the Health Trust last year, but it's now considering coming back. Swanton was assessed a $7,000 exit fee, and paid it. If the town returns, the league says it would reimburse that fee.

So far, Shelburne is the only town that has opted out. It has taken a deal from another broker who has promised to save the Chittenden County town nearly $30,000.

The VLCT expects towns that re-up may find that the new plans won't exactly match their current coverage, but officials say they will work with them to analyze their choices.

The deadline for cities and towns to decide whether they will sign up for the new plan is Sept. 1st.

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