The Town of Tonawanda and its labor unions have agreed on a single health-care provider -- an agreement that will save the town $2 million a year.
"I'm extremely pleased," Councilman John J. Flynn said. "This is going to save the town a considerable amount of money not only in the next couple of years but in the future as well."
BlueCross BlueShield is the provider in a two-year pact between the town and its three unions as well as its 50 non-union employees.
The town has traditionally offered three or four health-care options to salaried, hourly and police unions.
Supervisor Ronald H. Moline said the agreement will provide "rate stability" and allow the town to avoid a 14 percent increase in health-care costs each year of the two-year agreement.
He added that over the past few years, the town has had to increase its medical insurance expenditure each year as costs rose.
This year's budget calls for $8.5 million to cover employee health benefits, including retirees. Last year's allocation was $7.9 million. In 2004, the town paid $7 million and 2003, $5.2 million.
"Health-care costs increases have been really significant," Moline said. "This action will make it possible to stabilize those costs for the next two years."
The town's efforts to offer a single carrier began in 2004 when it hired a consultant, Niagara Insurance Group, to educate and guide the town and unions in going from multiple providers to a single carrier and getting the best savings in the marketplace.
Flynn said negotiations and the transition to single provider went smoothly.
He added that the switch will result in employees receiving a better health plan as well as relief from health coverage as a stumbling block at the negotiation table.
"There were no litigations as other municipalities have seen," he said. "We avoided litigation costs, and there was no animosity between the town and town employees. Everyone wins."
The agreement is effective Saturday.