On August 12, 2011, the Executive Office for Administration and Finance (A&F) issued emergency regulations regarding the recent Municipal Health Insurance Reform Act (the "Act"). The regulations establish procedures municipalities must follow when accepting Section 21 of Chapter 32B and engaging in negotiations with public employee committees (PECs) over their proposed mitigation plans. They also set forth procedures for the conduct of health insurance review panels. These emergency regulations are in effect for 90 days in order to allow A&F to further consider public comments and to adopt final regulations.

The emergency regulations are hyper-technical in nature and add significant detail to the implementation process set forth in the Act, including the following:

• defining key terms used in the new process;

• establishing notice requirements, including advance notice to each collective bargaining unit of the vote to accept Section 21, notice of the outcome of the vote, and notice to the PEC of the intent to enter into negotiations over the municipality's proposed mitigation plan; and

• outlining the steps to be taken by the public authority and the PEC during the 30-day negotiation period, including the necessary notice to be provided to all subscribers regarding any changes in plan design.

In addition, the emergency regulations establish procedures governing the municipal health insurance review panel. The regulations address the amount of notice a municipality must give A&F that it is beginning negotiations over its mitigation proposal. They also state how the impartial panel member will be appointed, address the submission of the matter to the panel if the parties are unable to reach a written agreement, and the process to be followed by the review panel.

Significantly, the emergency regulations provide a municipality whose subscribers are already covered by the Group Insurance Commission (GIC) may not implement changes to plan design under the municipal health care reform framework until it has followed the procedure for withdrawal from the GIC as set forth in the GIC's regulations.
 

Finally, where a municipality initiated the process for changing group health insurance benefits under the reform legislation prior to the adoption of the emergency regulations, the Secretary of A&F may waive or modify those provisions so long as the municipality complied with new sections of the Act.

As written, the emergency regulations appear to directly conflict with the Municipal Health Insurance Reform Act in at least one key respect. The Act itself provides that an agreement with the public authority must be approved by a majority vote of the PEC, provided that the retiree representative has a 10% vote. The emergency regulations, however, provide that the PEC shall have a weighted vote as set forth in the pre-existing Section 19 of the law. Not only does this appear to be in conflict with the Act, it is inconsistent with the Legislature's stated intent in enacting the reform legislation. Hopefully, A&F will amend this provision in the final regulations.

Attached for your reference is a copy of the emergency regulations, which will remain in effect until November 12, 2011, or the adoption of final regulations.

In light of the detailed nature of the emergency regulations, municipalities are well advised to confer with labor counsel before taking any action to accept the new provisions of the Act.