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Friday, January 27, 2012

Dickinson urged to activate insurance panel

As published in the Record Journal, Wednesday January 25, 2012

By Russell Blair
Record-Journal staff
(203) 317-2225

WALLINGFORD — Town Councilor Nicholas Economopoulos made his case Tuesday night for the town to revive its long-dormant Insurance Commission.

The commission was created by a town ordinance in 1986 to assist the town in insurance matters, but has never had any members. A risk management office created in 1987 took over some of the duties that the commission had been tasked with carrying out.

But Economopoulos, a Democrat, said during a public hearing on repealing or amending the ordinance that insuring the town and its employees is a complex issue, and that those types of decisions should not be made by one or two people.

“Insurance is a very intricate and difficult thing to understand,” Economopoulos said. “Our premiums (for health insurance) are $45 million over the next two years. ... I think it’s a wise thing to add some more eyes.”

Health insurance is the second costliest item in the town budget after salaries, Economopoulos said.

The ordinance states, in part: “Due to conditions of instability and dysfunction in the procuring and maintaining of insurance coverage for the Town of Wallingford , the Town Council has determined that a separate and dedicated advisory commission in the area of insurance coverage is warranted and desirable.”

One of the responsibilities of the commission, which would comprise five members appointed by the mayor and confirmed by the council, is to “investigate alternative sources for insurance coverage and/or evaluate options of self-insurance versus purchased coverage.”

The town became self-insured in 2008 when it faced an 8 percent rate increase by Anthem Blue Cross, a change that saved millions of dollars. But Economopoulos said that a study done 14 years earlier had referenced the potential change, and that the town “missed the boat” on millions of additional savings.

Self-insurance is generally cheaper than full insurance because the town, rather than the insurance company, accepts the risk of covering employees. Under self-insurance, the insurance company simply acts as a third-party claims administrator. Anthem was awarded the third-party administrator contract.

Mayor William W. Dickinson Jr. said the town analyzed self-insurance options in the 1990s, but there were some concerns about making the switch for “good, solid reasons,” and that it wasn’t in the best interest of the town at the time. The town needed to have sufficient money in reserves before it could make the switch to self-insurance.

“It did not sit well with the finance department at that time,” Dickinson said. “It was touch-and-go as to whether there were sufficient funds.”

Dickinson also said that health insurance is largely a collective bargaining matter, and not something for a group of laypeople to oversee. It’s a matter for paid experts, he said. The commission, Dickinson said, was originally established to handle property/casualty insurance, but not health coverage.

Two residents, Wesley Lubee Jr. and William Comerford, filed an ethics complaint in 2008 against Dickinson for not appointing anyone to the commission, but the complaint was dismissed when no probable cause was found. Both spoke in favor of filling the commission Tuesday night. Public comment at the meeting lasted nearly two hours.

“I think this was a great conversation here tonight,” Democratic Councilor John Sullivan said. “I have to commend Councilor Economopoulos for bringing this documentation and presenting it to the council. There is a lot here to review.”

The council will continue the public hearing at its Feb. 28 meeting.

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