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Board of Aldermen 3-31-2020 Page 12

Alderman Harriott-Gathright

President Wilshire can | have another question?
President Wilshire
Alderman Gathright.

Alderman Harriott-Gathright

Alright so our starting point is with the unaffiliated, | think, for me, where | am struggling with this, because |
think our starting point should have been with the Union, because if we pass this tonight, and the Union
says,”no” — where is the savings?

Kim Kleiner, Admin. Services Director

So whenever we institute health care changes in our City because we do have 17 Unions, we have to start
somewhere.

Alderman Harriott-Gathright

Yes.

Kim Kleiner, Admin. Services Director

And we can always say “Oh we should have started with negotiating with this group” or “we should have
started with that group”. You have to deal with the groups that have contracts that are expiring and that’s
where you have to start. Because you have to start at the beginning of the process. We do know that each
group, as they come on, will save the City money. As we see people shift over to the HSA, there will be
savings. That is not to say that we can’t engage in having employees shift during every open enrollment from
the HMO to the HSA without any Plan Redesign. But what we do know is that you have to start with some
group, the unaffiliated of course doesn’t have a contract that expires; it is managed between the Mayor and
the Board of Aldermen and that’s where we decided. There are other conversations that are happening and
we will deal with that through the CBA Strategy Team and we will have active conversations with 17 other
different Unions.

Mayor Donchess

Can | answer Alderwoman Gathright’s question a little bit more? First of all there is a group of unionized
employees who seems likely now to agree to this change and there are a number of factors that would be
included in the agreement. But it seems like that will probably happen. Number Two, oftentimes changes we
make with the unaffiliated occur first and when we — or by themselves or only to the unaffiliated and those are
often very favorable things. For example the last time we revised the Ordinance governing affiliated
employees, we raised the pay scales, we increased the number of steps, we raised the steps and a number
of people benefited very substantially from that. This was not anything that was available to other employee
groups. So we, in the past, have done a lot for unaffiliated employees. And Number Three — this will mean
that whoever gets in on this, their weekly contributions will go down significantly. So if this becomes effective
for July 1 for the unaffiliated employees, the amount the unaffiliated employees have to give into the City will
be reduced by about 15%. So that’s, you know, $50.00 a week on a family plan. It could be that, maybe even
a little bit more, so they will save money along with the City. It’s not just the City that is saving money. The
vast majority of unaffiliated employees will actually see a weekly benefit out of this. | think that’s why we
didn’t get many questions. | mean people are thinking, “Well I’m now paying $350.00, maybe 1’ll only pay
$300.00 starting July 1, that sounds pretty good”. So the bottom line of all three points is | don’t think we are
— and | think the point of your question, is that | don’t think we are being unfair to this group of employees. |

Board of Aldermen 3-31-2020 Page 13

think we have done very well by them in the past and this doesn’t really, it isn’t really a disadvantage, it’s just
a realignment of the plan where people, including the employees, will do better.

Alderman Harriott-Gathright

Thank you. Alright, let me just say this that | hear what you are saying but what you are saying is not the truth
of unaffiliates and | am going to say that OK? Last year when we made the change and | was against that
change of some of the things that were happening with the unaffiliated, OK? | have a background from
Verizon for 35 years, OK? And as management as well as management in the Union, | know the difference.
So what | am saying to you is that when | ask the question about the monies, that’s what it is about the
monies, who is paying what and no disrespect to Alderman Tencza, but it depends on the families involved, it
really depends on the family involved. If your family is fairly healthy and guess what? Usually if you are at a
certain pay scale, your family is. And at other certain pay scale, your family is not.

So when you make those types of changes as to who can afford to pay for medical care it makes a difference
and that is my point. | feel like you’ve got 135 employees OK that you are asking to do this and they probably
will do it not because they think that’s the best for their family but because they want to keep their jobs.

That’s the reality here. And | know that you know that. And I’m sorry if | am getting upset about it because |
am tired of this game that we play, literally play. If you are fairly healthy and even at my age, | am fairly
healthy and | have certain insurance through Verizon, very good insurance. But when | look at people that
don’t have what | have even insurance-wise, there’s a whole different ballgame for those people. And | think
if you were to really, really, | know that you had a meeting | know that Kim had a meeting and Director
Budreau, all of you guys had meetings with these folks. But do you truly believe that they were going to tell
you what they really felt? And that’s where | am struggling with this. | feel as though any employee in this City
should be able to talk and be honest about how they feel about what is happening with them.

Mayor Donchess

Well they would, you know, we asked. If someone disagreed with this, you know, there are no repercussions.
Now these are all fairly well-paid employees, these are not hourly workers, these are middle management
and up. So these aren’t the people down doing automobile registrations, these are people that make
probably at low end, probably $60,000.00 up to $120,000.00 or $130,000.00 apiece. These are not your
hourly workers?

Alderman Harriott-Gathright

$120,000.00 to $160,000.00 a year is that what you’re saying?

Mayor Donchess

Ms. Kleiner and Mr. Budreau can correct me but | think on the low end, these employees make in the $60’s
and on the high end, some of the high end as high as in the $120’s. And a lot of people over in six figures, so
these are not poorly paid workers who are giving a huge amount out of their paycheck to healthcare. These
are employees that at least within the City universe are relatively well paid.

Alderman Harriott-Gathright

If you tell me that somebody is making $60,000.00 a year and they have a family and they live in Nashua and
they are paying rent, you are telling me they are doing OK? Literally?

Mayor Donchess

| guess I’m telling you that if they can save $50.00 a week on healthcare, that helps them.

Nashua Signs — page 9
9 November 2021

Mine Falls /Nashua Manufacturing Company 1886 Gatehouse

Mine Falls Park consists of 325 acres of primarily undeveloped land in the center of Nashua, NH,
located primarily between the Nashua River and a canal system. In 1823, the Nashua
Manufacturing Company purchased the land (that is now the park) in order to construct a canal
and gate system to power a mill complex that would manufacture textiles. In 1824, the Nashua
Canal and Mill Pond were hand dug in order to convey the Nashua River water to the
manufacturing facilities. In 1886, the gatehouse was constructed as part of this canal system. The
Nashua Canal, Mill Pond and the gatehouse are on the list of National Register of Historic Places.
The gatehouse was in disrepair and, in part due to the interest of the Fairgrounds Middle School
Historic Preservation Team, federal grant money was awarded to partially restore the building and
surrounding area.

A Historic Preservation Study of the gatehouse, completed in January 2006, was conducted to
obtain an inventory of both the interior and exterior of the building, to summarize the physical
evolution of the building and evaluate the importance of the architectural, structural, mechanical,
and archaeological components of the gatehouse. Recommendations for the historic preservation
and physical restoration of the structure were made and prioritized as part of the study. Based on
the available funding, the design of Phase I of the restoration and preservation of the gatehouse
began in January 2007 by the Louis Berger Group of Manchester, NH and in March 2008
construction of the improvements began by Engelwood Construction Company of Bedford, NH.
Improvements included interior and exterior cleaning, roof replacement, pointing and replacement
of bricks; replacing windows and doors; installation of railings; replacing wooden stairs to the
sluice area, updating the electrical supply while preserving the old components; installation of
safety and emergency systems, and rehabilitating the mechanical furnishings in the gatehouse.

The gatehouse is significant for its unique and refined construction methods, integrity of design
and materials and surviving mechanical equipment integral to the design and function of the
building. The surviving components represent the evolution of the operation of sluice gates from
manual power through early and later electrical systems and therefore provide insight into the
changing technologies and equipment associated with such specialized structures. The gatehouse
is located at one of the main entrances to Mine Falls Park. Now that the gatehouse has been
partially restored and with its location in a highly used and well-maintained area in the park, the
gatehouse can be a focal point to Nashua’s past.

Since 1998 when the Fairgrounds Middle School Student Historic Preservation Team (SHPT)
showed an interest in preserving the gatehouse, the project became an entity in the community that
many within the City and outside the City could embrace. Mary Coe Foran, teacher advisor and
the SHPT (over one hundred students through the 10-year process) led the charge to get interest in
the project and provide comment and input at all stages. Funding of the work was provided by a
HUD grants spearheaded by Sen. Judd Gregg. Dr. James Garvin gave wonderful direction to the
student group in the early stages Nashua and was an avid supporter through the completion of the
project. Dean Shallop and others at the Nashua Telegraph wrote articles throughout the ten years
it took to complete the project. City leaders- three mayors, alderman, staff of the Parks,
Engineering, Community development (Others) took necessary action through the different phases
to get the project done.

Board of Aldermen 3-31-2020 Page 14

Alderman Harriott-Gathright

OK well | will just stop at this point because | see where we are going. | am against this. And | will not vote for
it.

President Wilshire
Are you all set Alderman Gathright?

Alderman Harriott-Gathright

Yes, | am thank you.

President Wilshire

Thank you. Who else would like to speak? Alderman Dowd?

Alderman Dowd

Just a couple questions, | am going to ask one ata time. First of all, | could be wrong but | think there are
already some people in the other unions that are already on the high deductible. In fact, | may be wrong, but |

think that half the fire department is on the high deductible is that correct?

Kim Kleiner, Admin. Services Director

That is correct.

Larry Budreau, Human Resources Director

May | respond?
Alderman Dowd

So it’s correct, thank you. It’s not just this 135 people that are going to be in the high deductible, we’ve
already had people start to change. So one of the questions | had from some of the non-affiliated is “why are
we paying them twice a year rather than putting all the money in July 1°” and they are also concerned that ok,
now that’s two times, it could change to three times and they are concerned about what documentation that
they are going to — like we said we would pay them over if they ran out. But they afraid that they are going to
provide serious documentation and it is going to take time. That’s the one portion that | would be OK with if
we Say it is a simple form and it happens quickly and they are not out on a limb with payments. And also the
other part of the question is, don’t we as a City keep track of every employee’s use of the funds and don’t, we
know when they are getting close?

Larry Budreau, Human Resources Director

Thank you, Alderman Dowd. You may have to remind me of a couple of the questions but to actually to start
and go backwards. No the City does not track the claims activity of the employees so we don’t have that
information in our system. We do get weekly bills but they are only segregated between the School and the
City. The purpose for splitting the contributions into two segments is that, on occasion, it doesn’t happen a lot
but on occasion someone will come and join the City and we will pay them $3,000.00 on July 1* and then
they won’t stay very long. It creates two problems — one is it makes you feel that you’ve been taken
advantage of and that’s not a comfortable feeling. And the other is and | can’t speak eloquently on it right
now but you have to be a high deductible health plan in order to have so much money in a health savings
account. If someone goes in and doesn’t stay for very long and they leave and we’ve given them $3,000.00

Board of Aldermen 3-31-2020 Page 15

we may have exceeded the IRS limitation.

Earlier you had said and | think | may have missed part of your question but to confirm a couple points that
you made. Yes we had been marketing and this has been growing very successfully, we picked up over a
couple hundred people last year, we are now at 675 employees enrolled throughout the organization,
throughout the City and the School and obviously most of those are unionized employees because most of
our employees are. The Fire Department does have the highest percentage of people enrolled as that group.
We believe that’s because they have the opportunity at the Fire Stations to discuss these things and we’ve
seen now every new employee at the Fire House, they come back and when they sign their benefits they are
joining the health high deducible plan because their colleagues are imploring or not imploring but
recommending that they do. And in the Police Department there’s a craze going on, it feels like they are
highly enthusiastic and | believe that regardless of this Legislation and some regardless of what happens with
Unions, they are getting it. These plans cost everybody less money and so | think we are going to see a
surge on July 1* this year just because of all of this discussion. And if I’ve missed something and you want to
catch me while I’m still on please do.

Alderman Dowd

| think you’ve caught most of it. | have heard from some of the people in the education department and they
seem to think that the sales pitch to the teachers and staff has not been significant enough to change. So |
am not sure how we address that and give them more presentations. | think part of it is a trust factor. They
want to make sure that everything is ironclad and people are very subject to issues with changes as we’ve
found out with all the stuff going on lately. So | think once you get more and more people on, it'll snowball.

The question related to that is Manchester’s health insurance costs have only gone up 2% a year is that
because they are so far ahead of us? Nobody wants that question?

Kim Kleiner, Admin. Services Director

No I'll be happy to, so Workplace Benefit Solutions does work with the City of Manchester and they have
been actively moving people to the high deductible health plan for over four years now. So are they ahead of
us? Yes, they are ahead of us. Most of their School population is on the high deductible health plan. They
have certainly seem some benefits in savings from that. You know when we had Tom DeLacey from WBS
go over and meet with the Union Leadership, | think they were working on some ways that they could further
address teachers, you know, through their team leads and the Union Leadership and that might create that
trust that you were just speaking of, Alderman Dowd. But yes, the City of Manchester has realized savings
embarking on this type of worth.

Larry Budreau, Human Resources Director

I’m sorry | didn’t mean to interrupt you but | recalled that one of your concern or concern that had been
expressed to you was wondering how difficult it would be to access this second half of the contribution if
necessary. This is my most recent EOB, | received it earlier this week and at the bottom of it, it tells me how
much of my deducible | have reached. Our plan is to make this very simple and just show us a copy of that,
that shows that you have exceeded the $1,500.00 on your deductible spending thus far, it does have a little
provider information but | can block it with one finger, that’s not our interest. Just show evidence that you
have exceeded the $1,500.00 and we will pay the second half.

Alderman Dowd

OK my last question is | looked at the slope of one of the first charts you had Ms. Kleiner and that insurance
growth is, if it keeps going, it is going to take a significant chunk of our budget and we won’t have increases
for anything else. So not only do we have to work to lower that number but | am just wondering if we need to
take a one time hit and say we need a new baseline to work from, otherwise, we are never going to get there

Board of Aldermen 3-31-2020 Page 16

with the budget.
President Wilshire
Director Kleiner did you want to respond?

Kim Kleiner, Admin. Services Director

Well | certainly couldn’t have said it better than Alderman Dowd. It cannot continue, we can’t continue on the
course we are on. | do believe that with the processes that we are putting in place, all the additional
measures, as well as moving everyone over to the HSA even though it may take time to negotiate these into
contracts, we can still move people on annual enrollment. | mean we can still do it through employee
education while we are negotiating contracts. WBS estimated $6.8 million dollar savings and | think that is
what we strive for.

Alderman Dowd
| just got another thing on-line while we were discussing and that is what is going on now with the pandemic
and City Hall closed. Is there any way we can extend the sign-up period or even make it an on-line system

because otherwise you could have a problem with people signing up period.

Kim Kleiner, Admin. Services Director

So again Alderman Dowd raises a really good point because we just had a phone conversation on that this
morning, Director Budreau and | and his benefits team. It is going to be a challenge this year. We are
reaching out to WBS to see what they have in their wheelhouse, what products we can rely on. We will be
working with IT to see what recommendations that they have. But there’s a conference this Friday that we
know of that because people are starting to discuss this, now your open enrollment becomes a virtual one
because of the on-going situation. So we will have to work through those challenges.

Alderman Dowd

OK | am all set.

President Wilshire

Thank you, Alderman Dowd. | have Alderman Jette.

Alderman Clemons

And can | speak when you have a chance too, this is Alderman Clemons, thank you.

Alderman Cleaver

Alderman Cleaver as well.

President Wilshire

OK | have Alderman Jette, Alderman Clemons and Alderman Cleaver.

Alderman Jette

This is Alderman Jette can you hear me?

Board of Aldermen 3-31-2020 Page 17

President Wilshire
Yes.
Alderman Jette

OK good. So | understand, you know, we’ve been told for some time about the increase and the rise in
healthcare cost and how that is so difficult for the City to deal with in light of the fact that there are so many
other pressures being put on the City like the State Government is doing less and less to support us. But |
think this comes at a difficult time. | am thinking about our employees and from what I’ve heard this evening is
that the high deductible health plan is not being changed at all and it is something as attractive as itis, is an
option for employees to choose even without this Legislation. What this Legislation does is increase the
deductibles for the HMO Plan and so you know, | saw the chart that was part of the PowerPoint Presentation
and it showed how much greater the healthcare costs for the people in the HMO is or are and how that when
you divide it by the number of employees there, it is the higher average per employee. But! wonder if that’s a
reflection on the fact that the employees that have chosen the HMO have done so for whatever reasons,
probably because they see it as initially cheaper for them. But they could, in fact, be people with greater need
for healthcare and that if we move them into the high deductible plan, their cost will continue to be higher than
others and it will just increase the cost of what we are paying for health care for the people in the high
deductible health plan. | am just wondering, you know, are we just pushing those high claimants, the people
with the higher claims into a different group?

| also am concerned about the employees that are going to be affected by this, not probably in this first wave
but as we try to implement this with the other employee groups, the Unions, that are represented by Unions.
You know we are talking about people who are on the front lines and what this Coronavirus crisis that we are
facing, | am wondering are they more at risk and | wonder about people in the high deductible health plan
when they go to the doctor now, that $3,000.00 that’s in their health savings account and the $1,000.00 that
they are going to have to pay eventually, that initial $4,000.00 that they have to pay before the City takes
over, are they going to regard that really as their money and be more reluctant to seek health care. And with
this Coronavirus Crisis, the longer they wait if they need health care, the longer they wait to get healthcare,
the more expensive it is going to be. And | am just wondering what your comments are in that regard and
what our consultant or whether our consultant has weighed in on that issue?

President Wilshire
Director Budreau or Director Kleiner?

Kim Kleiner, Admin. Services Director

So I'll start off, President Wilshire and then Director Budreau can fill in any piece I’ve left out. We do
understand with COVID-19 Virus this is uncharted territory. We don’t know what that will do to claims, we
don’t know, we certainly encourage all of our employees, no matter what health plan you are on to seek
healthcare. That is one of the reasons we have waived those costs for the telehealth, cost for Sidney for the
Sidney App you can get a virtual call with a doctor and they can point you into the right direction; the cost for
that evaluation is waived as is the cost of testing. But | don’t think realistically that we are going to give much
information on what we expect to happen with claims as related to the current crisis.

Having said that, with the HSA if you are a family, the most you are going to pay out-of-pocket is that
$1,000.00. Now studies do not show that people have refrained from getting healthcare in order to save that
money. Studies realistically, time after time show that people become better educated consumers. You
know we used to say it is like having some skin in the game; yes it is their money and they'd like to keep it
and they’d like not to have to pay it so they are going to use some education and make some realistic
decisions in how that money is spent. And that has been what industry studies have shown over time. I'll
give it to Director Budreau.

Board of Aldermen 3-31-2020 Page 18

Larry Budreau, Human Resources Director

Thanks Director Kleiner, Good Evening Alderman Jette.
Alderman Jette
Good evening.

Larry Budreau, Human Resources Director

| think that one speculation or the reason that people join HMO is that they perceive that it may cost them less
which | believe you indicated. | think that’s a reasonable speculation, the reason that so many people are in
the HMO is because it has been the predominant healthcare plan for the last 40 years in this country. So
people have because that’s what they had and high deductible plan is much newer than that. If you are
comfortable with the plan you had at the last company then you join it when you come here.

So the high deductible health plan is, for the whole country, a new opportunity. | don’t believe perhaps some
cases it would be true, but | don’t believe that you could find many comparisons between two people with the
same healthcare conditions who would save money through having the HMO. And to the point of whether
people can access healthcare, the speculation will the higher cost payments move into the HDHP and
therefore the difference will go away? We would hope not and over time, as the data builds, and there’s now
probably 15 years of data that Anthem has that WBS can access, it continues to be consistently lower, it is
still $4,000.00 on average all these years later. So | think there’s a good chance that the lower cost continues
to prevail and I’m not sure that when people make healthcare decisions, | have been party to those first day of
employment decisions people make for a long time. It is not necessarily analysis because they think they are
choosing the least expensive; they are often choosing the one that they are most comfortable with. Thank
you.

Alderman Jette

Thank you.

President Wilshire

Anything further, Alderman Jette?

Alderman Jette

No, thank you very much.

Alderman Klee

Thank you and this probably goes to Director Budreau. Alderman Dowd had asked this question about the
breaking up of that $3,000.00 between July 1° and October 1“. First my question is it common practice to do
a lump sum or is it something — | mean so is that just part of the way that the program would work, you would
just pay it all at once or with an equal amount of payments. And the second part of that is what is the

expected loss, do we know on average how many people leave?

Larry Budreau, Human Resources Director

May | Madam President.

Board of Aldermen 3-31-2020 Page 19

President Wilshire
Talk to Director Budreau.

Larry Budreau, Human Resources Director

So Alderman Klee again, | am going to start with the last question first because that’s the one | remember.
And that is relative to phasing the contribution payment, basically is that necessary, how many people leave?
Well we did look at that, | don’t have the numbers in my head but it’s not really a lot of people. One of the
timing phenomena that this also considers and of course we are not talking about the schools yet in general.
Because the school year starts in September, but the Fiscal Year for the City and the Fiscal Year for the
health plan starts in July, there’s the possibility sometimes that we enroll a teacher and we provide the full
benefit for $3,000.00 and then they don’t return to school that school year. And so we could have in that case
paid the $3,000.00 to the contribution intending for that to be for the next 12-month period and it might only
end up being for the next 2 months, July and August.

Secondly, we have mostly been communicating with Manchester about their plan and they do pay their plan
in installments also.

Alderman Klee

| am in complete agreement with paying it in payments, | just didn’t know if it is common practice for one big
lump sum or is it more common to have it kind of drawn out whether it be July and October or four times a
year or three times a year. | would feel more comfortable if it was paid out that way but | also understand if
you have one maior incident at the beginning of the year you want that $3,000.00 there. But again if they
then did have that care and got the $3,000.00 and then left as you said whether they took it with them or used
it, it still is in the same kind of boat. So thank you.

President Wilshire

Alderman Clemons?

Alderman Clemons

Thank you very much. So | have a few questions, I'll let whoever wants to answer them answer them. So
just so | am clear, there are no copays on the high deductible plan correct?

Larry Budreau, Human Resources Director

Correct.

Alderman Clemons

So like if you go to the pharmacy or you have a prescription or whatever, you are just paying whatever the
prescription costs and then once you reach that, in the case of a family, once you reach that $4,000.00 then

what happens?

Larry Budreau, Human Resources Director

Then you don’t pay anything.

Kim Kleiner, Admin. Services Director

Just to note Alderman Clemons there was some question on this so | just want to be clear. They are paying

Board of Aldermen 3-31-2020 Page 20

the negotiated rate. So you continue to get, even though you are on the high deductible plan, you continue to
get the negotiated rate that Anthem has with either the pharmacy on the medical drug or the doctor on the
provider rate.

Alderman Clemons

Ok thank you. So overall on a month to month basis, you know the cost that comes out of the employee’s
paycheck, | am thinking that you explained it, the high deductible is less?

Kim Kleiner, Admin. Services Director

So currently as it is right now, the HMO is more than the high deductible health plan, and significantly, for a
family you are looking at $6,100.00, I’m rounding to a high deductible plan for you know $4,300.00. That
changes a little bit and with the HMO and the change you are dropping from that $6,000.00 to $5,100.00 and
the high deductible HSA Plan is just a tad bit more expensive at $5,274.00. So right now on the current HMO
it is considerably higher. And then with the shift in plan design the HMO will be just a tad bit less expensive.

Alderman Clemons
OK so they are about the same as far as the cost for what is coming out of my paycheck every week roughly?

Kim Kleiner, Admin. Services Director

With the new plan design yes. Now the employee with the HMO pays significantly more.
Alderman Clemons

OK so my other question is on the HMO Plan the deductibles are going up but if you take the HMO Plan the
City is contributing basically the exact amount the deductibles are is that correct?

Kim Kleiner, Admin. Services Director

So with the change in the deductible for the HMO which if you are to be hospitalized or have an outpatient
surgery you could be charged on a family that $3,000.00 deductible. The cost is going down 15% if you stay
on the HMO. It will drop 19% from the current HMO to the HSA if you were to switch over and I’m not sure if
that answers your question Alderman Clemons.

Alderman Clemons

So right now it’s a $250.00 deductible for an individual and a $500.00 for a family on the HMO correct? That’s
what it is right now?

Kim Kleiner, Admin. Services Director

Correct.
Alderman Clemons
OK so it’s going to change to $1,500.00 and $3,000.00?

Kim Kleiner, Admin. Services Director

Correct.