At its March 9 budget review session, the Board of Finance heard details of a $300,000 savings opportunity in the town’s self-insured employee heath fund.

Employee Medical Benefits Board Chairman Mark Mattioli and board member Jim Loring appeared to answer questions and to amplify significant points in a memo sent to town Finance Director Robert Tait and Newtown School District Business Manager Ron Bienkowski.

One week earlier, the benefits board recommended reducing the medical benefits Self Insurance Fund by $300,000.

According to the memo, during the first eight months of the 2014-15 plan year, claims were lower than expected. Mr Mattioli, however, told finance officials that major health insurers experienced higher trends in their books of business in 2014.

He said number of major national or global benefit consultants including Mercer, Aon Hewitt, and Towers Watson all have 2015 trend guidance in the 6–7 percent range. But Mr Mattioli said Mercer’s 7.1 percent drops to 4.6 percent when accounting for the reality that most employers are implementing significant benefit changes.

“That is a 35 percent reduction in the increase of cost,” the memo states. “The enrollment split between BOE/Town remains 76 percent/24 percent. Costs should be shared accordingly.”

It goes on to state that by taking into account a $300,000 cut in employer contributions, Mr Tait projected the reserve fund will be $3.12 million on July 1, 2015.

“With the projected ’15-’16 year program costs in the range of $14.1 to $14.5 million, that reserve level is right in the acceptable range, where we believe it should be,” the memo continues. Other key points are:

*The town’s Anthem renewal uses a 7.7 percent trend, to arrive at $14.5 million cost, $1.3 million of which is administrative cost.

*The reinsurance premiums are increasing 6 percent this year, compared to 17 percent last year. The reinsurance kicks in once the town reaches a significant dollar amount in claims.

*The number of claimants over $50,000, remained very consistent with last year, at 34, showing that 1.65 percent of members accounted for 32.5 percent of the cost, or $3.9 million (12 months through December 2014).

The medical benefits board memo also emphasized some of the factors, which are within the town and finance board’s control, to manage for the future success of this program. They include:

*Focusing on and investing in wellness programs that enhance preventive care, and encouraging membership to receive their scheduled care, which has many benefits.

*Educating members about how and where to find available information on the costs and quality of health care being delivered in Connecticut.

*Placing more emphasis on increasing the portion of membership enrolled in the town’s Health Savings Account or HSA-enabled health plan.

The town’s insurance consultant has pointed out that approximately $1.4 million of the claims in the last 12-month period were attributed to prescription medications.

“You should work with your insurance carrier, to try to help your members increase their compliance in following the medication regimen ordered by their physicians,” the memo states. “Typically, insurance companies and prescription benefit managers (PBMs) have several programs to assist in these efforts. Often these programs improve member health outcomes and member satisfaction with their plan.”

The benefits board also suggests adequate planning, preparation, and resolve in conducting town union negotiations.

“You are fully informed and aware of the estimated tax penalty associated with not changing your benefit programs,” the memo states, referring to a looming $1.55 million Affordable Care Act tax penalty referred to as the “Cadillac Tax.”

The board stated that penalty will fully activate in 2018 if the town does not significantly alter its benefit structure.

Besides making that $300,000 medical fund reduction recommendation, Mr Tait also discovered a $270,000 request in the school district’s budget for dental coverage that is redundantly available under the town’s self-insured plan.

Addressing the redundant dental account, the finance director previously recommended the district eliminate its current $200,000 fund balance, transferring it to the self-insured account to cover the migration of district staff to dental coverage under the town’s program. He said the difference of about $70,000 in anticipated dental costs for newly insured personnel would be absorbed in the $13 million insurance fund.

Prior to the session with the medical benefits board, the finance board heard presentations from the Edmond Town Hall Board of Managers and the C.H. Booth Library, both asking to either restore reductions made by the Board of Selectmen, or adding funding selectmen declined to do before finalizing their budget recommendations.