Amherst can save $700,000 annually by switching from traditional insurance to Medicare and a Medicare "gap" insurance from a single provider for about 170 retired town workers, Supervisor Satish B. Mohan says.
Mohan also says the changes will not reduce the coverage for retirees but will end a situation that forces the town to make duplicate payments for the same coverage.
But critics say the proposals are illegal because Mohan did not negotiate them with unions for the employees. Retired workers also expressed concerns about being forced to accept inferior insurance coverage.
Mohan insisted that would not happen.
"Your benefits will be a tad better. I promise. I promise," Mohan told two retirees.
Board members rejected proposals to offer retirees a $500 incentive to switch from traditional health insurance to a blend of Medicare and Independent Health's Medicare Encompass plan.
The board voted 5-2 to table the proposals for more study.
Mohan's proposed changes would affect the main insurance plans for retirees and "medi-gap," or supplemental insurance that pays for retirees' portion of large medical bills. By moving town workers from traditional insurance to Medicare and a single provider for the gap policy, Amherst could save thousands of dollars annually, Mohan said.
"What you are doing is illegal," former town fire inspector Bill Grady told Mohan. "This is America, I fought for this country. I'm asking you, let's vote on this tonight and get rid of it."
The Amherst Police Club, the union representing police officers, issued copies of a letter sent Monday to Mohan threatening to sue if the proposed changes go through.
The union and other critics said Mohan cannot impose the change without first negotiating them.
Chris O'Neill, president of the Amherst Highway Employees Association, charged that Mohan also is trying to impose the insurance on his union.
Town Council Member William L. Kindel produced a copy of a resolution that he filed in September 2004 calling upon the board to negotiate with town unions to accept a single provider of medical insurance, a step that will save "hundreds of thousands of dollars." Kindel said the motion passed unanimously.
Mohan acknowledged that retired town workers have the right to have the same insurance coverage they now have or better. But he also said the contracts allow the town to impose the changes if the coverage is not diminished.
Town Attorney E. Thomas Jones said the town cannot impose the changes on unions unilaterally.
"Our attorney says it is illegal, so I have written to the attorney general. After that, I will sit down with the retirees and show them there is no difference," Mohan said.