The Town of Hamburg switched health care plans for workers and some retirees Jan. 1 in a move to save costs -- but its largest employees union objects. The Civil Service Employees Association has filed a grievance over the switch, which affects about 100 of its blue- and white-collar members.
"It's our opinion that the change they implemented Jan. 1 violated the contract," CSEA Labor Relations Specialist Rob Mueller said.
But Town Supervisor Steven Walters said he thinks the dispute can be worked out.
"We did not change the plan; we changed the way the town pays for the plan," he said.
Coverage will continue to provide the same level of benefits.
Health insurance benefits cost the town close to $4 million a year, or about 10 percent of its total budget, making it a prime target for cost-saving efforts.
The changes should save a six-figure amount, compared with what previous plans would have cost, according to insurance broker Mark Byrne, vice president of Vanner Benefits LLC in Amherst.
Under the change Jan. 1, retirees over 65 enrolled in Medicare Part B were moved to a BlueCross BlueShield plan called Medicare Advantage. The plan takes better advantage of coverage through Medicare, Byrne said.
"They all have it -- it wasn't being used," Byrne said of Part B coverage, which supports expenses for prescription drugs and other nonhospital care.
For current workers, the change means medical expenses are covered by a high-deductible health plan from BlueCross BlueShield, which costs the town less than the previous plan.
Hamburg pays medical expenses up to the deductible -- $1,100 for singles and $2,200 for families -- keeping employees from seeing any increased costs, Byrne said. Once the deductible is reached, insurance coverage takes over.
Not included in the high-deductible coverage are prescription medicines, which continue to be covered without a deductible, he added.
Walters said the town is budgeting enough for every employee to spend the full amount of the deductible. That conservative practice should leave an unspent reserve at year's end.
While the amount of the savings is only a guess at this point, he said the changes should reverse a modest increase in expected costs.
Mueller said he wouldn't discuss details of the dispute because of the pending grievance action.
However, he added that the disagreement might be settled in a meeting with town officials, rather than through arbitration. He expects a meeting that had to be canceled last month to be rescheduled before the end of February.
The CSEA last year filed a lawsuit against the Town of Orchard Park for changing retiree health care coverage, a dispute that was later settled.
Walters said that no objections have surfaced from Hamburg's three other unions -- the Police Benevolent Association, the command officers union and the Internation Association of Fire Fighters, which represents emergency dispatchers.
"The unions have been very good to work with," he said, "helping to craft things that benefit the taxpayer."
The changes continue a push to put the brakes on rising health benefit costs, Walters said. The town went to a single-insurer system in mid-2007.