MANCHESTER — The Select Board decided to switch all town employees to a high-deductible health care plan, effective Jan. 1, that comes with a health savings account.
The unanimous decision, which affects 30 town employees, all but those in the police union, came at a meeting last week. Board members were trying to combat rising health care costs while formulating the town’s fiscal year 2010 budget, according to Town Manager John O’Keefe.
“The high-deductible plan has become more appealing as health care’s gone up,” he said. “I think you’ll see more and more towns do this.”
The Arlington Select Board recently decided to shift its three Highway Department employees to a similar plan, agreeing to fully fund the deductible in the first year.
In Manchester, the town will pay 92 percent of the deductible, O’Keefe said, which is $2,250 for a single plan and $4,500 for a family.
He said the move allows the town to level-fund its health care at $330,000. However, next year, if the town keeps the same high-deductible plan, offered through the Vermont League of Cities and Towns, health care costs would rise to $425,000.
O’Keefe said the town will look at the possibility of using a different provider in the coming year.
The new plan gives town employees a health savings account, which works like a checking account for medical expenses. Each year, if the employee
has money left over, they can carry it over to the next year, building up a sum to use in retirement.
O’Keefe said he and Treasurer David Fielding will educate employees on how best to use the account in the coming month. In Arlington, employees are receiving guidance from officials at Mack Molding, a local company that recently switched to a similar plan.
Manchester currently uses a standard copay plan through the Vermont League of Cities and Towns.
In part due to the level health care costs, the tentative town budget is only expected to increase spending by about $20,000. However, an $80,000 drop in revenue, is expected to increase the town’s municipal tax rate by 4.2 percent.
The Select Board still has another month to finalize the budget.
Contact John D. Waller at

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