Tom Delacey of Workplace Benefit Solutions gave a presentation on healthcare to the Town Council at their meeting Monday.
Town Manager Kevin Smith said Delacey’s firm was recently hired to look over the town’s options regarding healthcare, in consideration of the changes brought by the Affordable Care Act.
“He has had much success in other municipalities that he’s worked with, and so he’s here to give a brief presentation of what he’ll be looking for going forward with the Town of Londonderry,” Smith said.
Delacey said his firm is part of Hub International, the eighth largest consultant and brokerage firm in the country.
“It started here in Manchester by myself and David Larivee,” he said. “Our business has really been built around working with employers with 100 or more employees. Two areas that are kind of niches for us are municipalities and if you think of the two largest employees in any town, it’s usually the hospital and the town itself.”
He said his clients include the Town of Salem, City of Manchester, Manchester school district, City of Nashua, Auto Fair, and Catholic Medical Center.
“When we think of health care costs increasing at 9 or 10 percent a year, people tend to want to point the finger in one direction or another. Often times it’s pointed at the insurance companies, the hospital or it’s the doctor or the pharmaceutical companies. There isn’t one reason for the annual increases,” Delacey said.
Instead, he pointed to consumer demand.
“We all want more health care. Look at the hospitals – they’re all building. Even struggling hospitals are building to get out of trouble,” Delacey said.
He said government mandates drive up costs, as he said is being seen with the Affordable Care Act.
He noted people can go to different hospitals and see different doctors and get different prices for the same procedures.
Chairman John Farrell asked about the 2018 “Cadillac” tax of 40 percent, and asked whether the employer or the employee would be paying it. The tax is on so-called “Cadillac” health insurance plans. Delacey said there are no specifics yet but historically it would be portioned out like the insurance itself, i.e. the employee pays 20 percent and the employer pays 80 percent.
Delacey said there are different plans to choose from, ranging from Health Maintenance Organizations (HMOs) to self-insuring, and finding the right plan is the key.
Farrell asked if Delacey gets paid on a contingency basis, and Delacey said that was the agreement.
“So if you find savings, you get paid, and if you don’t find savings, you don’t get paid,” Farrell said.
Delacey said that was correct but he will also be paid a six-month consulting fee.
“But we guarantee that you’ll save at least what you paid us,” Delacey said.
Councilor Tom Dolan asked if it would be possible to join with the school district, the largest employer in town, and Delacey said that it was possible.
Farrell noted health care premiums rose $750,000 last year and the town can’t keep paying those costs every year – thus the decision to hire Delacey.