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Saybrook’s Non-Union Employees Moved to High-Deductible Plan

First Selectman Carl Fortuna, Jr., has announced that the town’s elected and non-union employees would join the town’s union employees as enrollees in a high-deductible health insurance plan (HDHP). The plan went into effect on July 1.

“There are five or six of us. The memo went out today,” Fortuna told the selectmen at the board’s June 26 meeting.

With a high-deductible health plan (HDHP), monthly premiums paid by both the town and the employee are lower than premiums would be for the same employee if covered by a more traditional preferred-provider organization (PPO) health plan. With an HDHP, both the town and the employee save each month with lower monthly premiums.

In the Town of Old Saybrook, the high deductible health plan designs already negotiated with town unions are one of two types; one is a plan with a $2,000 individual and $4,000 annual deductible and the other is a plan design with a $1,500 individual and $3,000 family annual deductible. Under either plan design, the employee is responsible for paying for annual medical costs out of pocket up to the value of annual deductible. After the annual deductible is reached, the insurance kicks in and pays.

Under federal law, employees enrolled in an HDHP can pay for those out-of-pocket annual medical costs with pre-tax dollars set aside in an employee-owned account called a health savings account (HSA). By agreement, the town deposits on July 1 each year a share of each town employee’s annual high-deductible into the employee’s HSA. The town’s share is an amount that is subject to union contract negotiations.

Employees in an HDHP also can contribute to their HSAs pre-tax in order to build a reserve to cover the annual deductible. Any funds not spent in HSAs by the end of the year roll-over to the next year and continue to build tax-free.