Section 3. Upon acceptance of this chapter as hereinafter provided, the appropriate public authority of the governmental unit shall negotiate with and purchase, on such terms as it deems to be in the best interest of the governmental unit and its employees, from one or more insurance companies, savings banks or non-profit hospital, medical, dental or other, service corporations, a policy or policies of group life and accidental death and dismemberment insurance covering employees, and group general or blanket insurance providing hospital, surgical, medical and dental benefits covering employees and their dependents as provided under section eleven and section eleven A if applicable and shall execute all agreements or contracts pertaining to said policies or any amendments thereto for and on behalf and in the name of such governmental unit. Said policy, or policies, including policies purchased under authority of sections three A and sixteen, shall contain a requirement that the insurance company, savings bank, nonprofit hospital, medical, dental or other service corporations, other intermediary or health care organizations, shall furnish the governmental unit, or its designee, all nonconfidential claims without diagnosis on a form satisfactory to the governmental unit including, but not limited to, computer tape, disc or unlined paper reports. Said insurer may, pursuant to a contract between said insurer and said governmental unit, charge the governmental unit a reasonable fee to cover the costs of providing the nonconfidential claims in the form requested by the governmental unit. Prior to the purchase of said insurance, and execution of all such agreements or contracts within the limits established by said sections, the appropriate public authority shall consult with an advisory committee for the purpose of securing the written recommendations of a majority of the membership of said committee. Said committee shall consist of eight members as follows: seven persons to be duly elected or appointed to membership on such committee by organizations of the employees affected, and one person who shall be a retiree of a governmental unit who shall be duly appointed to membership on said committee by the appropriate public authority. If the appropriate public authority finds that the committee's recommendations in whole or in part cannot be included within the aforementioned agreements or contracts, at the written request of any member of said committee within thirty days from the effective date of the agreements or contracts, the appropriate public authority shall submit to said member, in writing, the reasons for the rejection of any or all of the recommendations and a copy shall be filed with the commission. The appropriate public authority may execute said agreements or contracts for a period not exceeding five years; provided, however, that the portion of the cost of the premium per month to be borne by the governmental unit shall not exceed the estimated monthly cost for which funds have been appropriated for the then current fiscal year. If a town or district having accepted the provisions of section ten accepts any other section of this chapter but fails to appropriate the funds necessary to implement said provisions, the selectmen, in the case of a town, or the prudential committee or district commissioner, in the case of a district, shall certify the cost to the town or district, as the case may be, in carrying out the provisions of this chapter to the board of assessors who shall include the amount so certified in the determination of the tax rate of that year. If a city accepts the provisions of this chapter as provided under section ten and as further provided under sections seven A and nine E, the annual budget shall include sums necessary to implement said provisions. Arrangements may be made with the carrier or carriers issuing such policy or policies purchased under this chapter to reinsure, by reinsurance agreement, under conditions approved by the appropriate public authority, portions of the total amount of such insurance with such other carriers as may elect to participate in such insurance.

For the purposes of this chapter, any non-profit hospital service corporation or non-profit medical corporation organized under chapter one hundred and seventy-six A or one hundred and seventy-six B and any dental service corporation organized under chapter one hundred and seventy-six E shall be and is hereby authorized to enter into a reinsurance agreement as herein provided in the same manner as any other insurance company.