Phillipston Selectmen balk at cost, complications of health insurance trust fund 

  • Phillipston select board members. From left — Chief Administrative Office Kevin Flynn (back to camera), Kim Pratt, Chairman John Telepciak, and Vice Chair Terry Dymek.

Published: 3/15/2019 2:29:38 PM
Modified: 3/15/2019 2:29:53 PM


For the Athol Daily News

PHILLIPSTON — Select Board members Wednesday night decided to forego a proposal to have the town pick up 50 percent of the cost of premiums for group health insurance for employees who had worked full time for the town, including half the cost of supplemental insurance for retirees who have reached the age of 65 and are covered by Medicare.

Chief Administrative Officer Kevin Flynn explained, “At the annual town meeting, voters adopted an article asking the Select Board to prepare a report on providing retiree health insurance. Kelli (town accountant Kelli Pontbriand) and I did some research and I’ve provided you a draft report of what would be involved in providing coverage.”

Flynn said there are about 10 full time employees who would be eligible for health insurance. To comply with the Government Accounting Standards Bureau, Rule 74 and 75, the town would have to establish a trust fund to help defray the cost of providing retiree health insurance. To establish a trust fund, the town must hire an actuary who does a study of the town’s employees and determines how many people are eligible for the plan and what their family situation is like, because they don’t know who may or may not take the insurance. Following the study, a calculation is made of how much of a trust fund is needed. The report costs about $4,000 or $5,000 for a town the size of Phillipston.

Flynn spoke with Parker Elmore from Odyssey Advisors in Connecticut. “They’re the people who did Templeton’s OPEB (Other Post-Employment Benefits) plan for them. His guess was that for Phillipston the required trust fund principal would be somewhere around $500,000 to $600,000. By comparison, Templeton’s trust fund requirement is $6 million,” said Flynn, who explained the town can create the trust fund all at once – put the money in all at one time – or  do it over a number of years.

“However, you can’t touch it while you’re building it. Up until it gets to $250,000, you can hold onto it through a trust account at a local bank,” he said, “Once it reaches $250,000, it has to go into the state retirement fund and they are the trustees for it, by law. Once it gets to the final number - $500,000, $600,000, whatever that final number is – each year the town can use the investment income to defray the cost of the retiree health insurance. It’s probably not enough to cover the cost, meaning you’d have to come up with additional funds to cover that cost.”

Flynn also pointed out that, according to Elmore, costs would not be associated solely with a retired employee but also with their spouse, if the employee is deceased.

“Also, if they have a child with a disability, the child would be able to continue the benefit long-term.”

In response to a question, Flynn said employees would pay half the cost of the premium under the plan being considered.

Board member Kim Pratt said, “My feeling would be that this is kind of a big project for us to undertake at this point.”

“I agree,” said Vice Chair Terry Dymek. “It’s a lot more complicated and a lot more money than I had anticipated. I thought it might be 10 grand every year – no big deal, right? But this is lot more than that.”

“Almost all cities and towns do this,” said Town Clerk Karin Foley. “We’re one of the few that don’t.”

“I think we should just shelve it,” said Pratt. “I really don’t think it’s anything we can look at this year.”

The board decided to discuss the matter further with the town’s Finance Committee and to present Flynn and Pontbriand’s report to the upcoming annual town meeting.

In other action, the board voted to accept a grant from the state Dept. of Conservation and Recreation. The grant will reimburse the town for half the cost of a number of items – ranging from power tools and shovels to backpacks and firebreak hose – used to battle brush and forest fires. The total cost of the items was estimated at nearly $2,200.

The board also sent back to the Agricultural Committee for further review a draft of proposed bylaws and guidelines for use of town’s proposed community garden.

“I think it’s over-done,” said Dymek. “There’re too many rules and regulations. I think there’s overlap. It might frighten some people off. It seems like it ought to be a pretty simple thing, with some simple dos and don’ts. But I just think this goes too far.”

“I definitely think it can be condensed,” Pratt agreed.

The board also voted to enact a policy regarding acceptable methods of payment for licenses, permits, and other fees. The tow will accept personal checks, money orders, and bank checks made out in the exact amount and made payable to The Town of Phillipston. Credit cards may be used for online payment of real estate taxes, vital records, and dog licenses only. A penalty of $25 will be charged for all returned checks.

Cash payments will no longer be accepted for any reason.

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