February 13, Proposed Employee/Retiree Health Insurance Coalition Agreement FY2013-FY2015 Town of Lexington and the Lexington Public Employee Committee

February 13, Summary of Negotiated Agreement Negotiated Under Coalition Bargaining Statute, Rather than New Health Insurance Law Join the State’s Group Insurance Commission (GIC) Program, Effective July 1, 2012 Three-Year Agreement, FY New Employee/Retiree Contribution Rates Creation of Two Health Reimbursement Accounts (HRA) to Mitigate New Deductibles and Co-pays New Medicare Part-B Subsidy for Retirees, Funded by Lower Town Contribution Rates Town of Lexington Proposed Employee/Retiree Health Insurance Coalition Agreement

February 13, FY2013 Financial Impact TOWN: Estimated Premium Savings of $2.6 million in FY13. There will be a $1,120,000 set aside for employees and retirees, however, to mitigate the impact of GIC deductibles and co- pays. EMPLOYEES/RETIREES: Estimated Premium Savings of $1.9 million in FY13. Town of Lexington Proposed Employee/Retiree Health Insurance Coalition Agreement

February 13, New Employee/Retiree Contribution Rates Town of Lexington Proposed Employee/Retiree Health Insurance Coalition Agreement

February 13, Mitigation for Employees/Retirees 1.HRA-Part 1: Debit Card to cover out-of-pocket deductibles equal to – 75% in year 1; 50% in year 2 and balance in account in year 3 2.HRA-Part 2: Reimbursement of high out-of- pocket co-pays between $2,000 and $5,000 for individual plans and $4,000 and $10,000 for family plans. 3.Contribution by Town of 40% of the monthly premium of Medicare Part B for eligible retirees Town of Lexington Proposed Employee/Retiree Health Insurance Coalition Agreement