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Waddington plans to cut health care costs

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WADDINGTON – The town council is considering switching its retirees’ health care plans in an effort to keep next year’s tax levy below the state-mandated 2 percent cap.

Under the town’s proposal, retired employees would switch from a Medicare supplemental plan to a Medicare Advantage Plan.

The switch was proposed by Town Supervisor Mark Scott at a special meeting this week.

The plan is set up as a health reimbursement account, an employer-funded health benefit plan that reimburses employees for a maximum of $1,250 for out-of-pocket medical expenses and individual health insurance premiums. Procedures or visits beyond $1,250 would be paid for by the Medicare Advantage plan. The town will continue to pay half of the premium for dependents or up to $625 for dependent medical expenses.

The difference is it requires retirees to pay up front for medical care and to file a claim in order to be reimbursed for those expenses.

“Carol Burns, our town clerk, is always happy to work with retirees to file claims,” Mr. Scott said.

Mr. Scott said all medical expenses covered under the old plan will be covered by the new plan. The new plan will also include hearing exams and an eye exam covered with co-pay, which were not previously offered.

“There really is no downside,” he said. “It’s a no-brainer.”

The difference in savings comes from the premiums, Mr. Scott said.

“Currently we are paying $360 (per month) for premiums,” he said. “Under the new plan, we would reduce that to $193 per month. If they don’t utilize the HRA to the maximum extent, that is another opportunity for additional savings to the town.”

Under the plan, the town would save $3,200 to $8,840 annually for all retirees and their dependents on the Medicare Advantage plan.

“It depends on how much they utilize the HRA and how much their co-pays are,” Mr. Scott said.

If the health reimbursement account utilization rate is at least 50 percent, the town stands to save $5,000 to $6,000, Mr. Scott said.

“It doesn’t sound like a whole lot,” Mr. Scott said. “But that’s enough to keep us under the 2 percent tax cap. We are always looking to keep the tax levy stable, and we continue to look for areas to save.”

Mr. Scott anticipates the savings to the town would equal $1.6 million in assessed value, or six homes valued at $250,000 each.

“In Waddington we don’t build that many homes in a year,” he said. “It would take three to four years to build that up in new assessed value.”

The town council is expected to vote on the issue when it meets at 7 p.m. March 11.

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