PROVIDENCE — A public organization that aims to help five northern Rhode Island municipalities save money on health care held its first public meeting yesterday afternoon.

The governing board of the Rhode Island Municipal Insurance Corporation selected a North Providence official as its chairman and learned that the entity still has some obstacles to overcome in its negotiations with Blue Cross Blue Shield of Rhode Island.

Still, the mood was upbeat after the group’s first meeting.

“I really think this is the start of something very big,” said the newly elected chairman, Rocco Gesualdi, North Providence’s director of administration.

The northern municipalities have already generated huge savings by joining together and acquiring health-care insurance services through the newly formed corporation.

For example, Johnston saw one health-care fee drop from $65 to $38.50 per employee per month. Officials representing school districts and municipal governments in each of the five communities — including Woonsocket, Lincoln, North Providence, Johnston and Cumberland — confirmed that none of the communities is paying more than $38.50 for the same administrative fee.

Meanwhile, Christopher Lambert, the corporation’s Providence lawyer, announced some sticking points in the group’s latest negotiations with Blue Cross Blue Shield.

So far, he said, Blue Cross has declined to indemnify the corporation. This is because the corporation has no assets and it is uninsurable, Lambert said. Indemnity would protect the corporation and leave each community legally responsible for its own actions.

Also, Blue Cross wants the corporation to be responsible for ensuring the eligibility of the employees being served, Lambert said.

At present, the municipal governments and school departments in the five participating communities have that responsibility, he said.

Assigning that task to the corporation could create the need for an administrative bureaucracy — something officials had wanted to avoid, Lambert said.

He said that he hopes to sort out the issues in talks with Blue Cross next week.

Lincoln’s representative, finance director John Ward, asked if there is a point at which the tentatively negotiated health-care agreement cannot happen if the parties can’t reach a final agreement.

“I guess that would be an ongoing discussion,” Lambert said.

The negotiating tact might be different if the communities were still being charged administrative fees as high as $52, $65 or $66 for each employee, he said.

“I think we’d be pressing them a lot harder,” he said.

Each of the corporation’s communities runs its own health-care insurance program with administrative assistance from Blue Cross Blue Shield. The charge for that assistance is based on the per-employee cost.

The communities have already seen reductions in the fees after the corporation reached a preliminary agreement with Blue Cross, Lambert said.

In an interview after the meeting, he downplayed the chance that Blue Cross might pull out of the tentative agreement, forcing the communities to scramble for insurance. Blue Cross has demonstrated good faith already, he said.

“I suppose anything’s possible,” he said. “Certainly that would be an unlikely and extreme position.”

Lambert distributed a version of the bylaws to each of the board’s members before a vote to approve at a meeting that was scheduled for Aug. 20.

After selecting Gesualdi as chairman, the board also picked Robert Parker, Johnston’s chief of staff, as vice chairman and tapped Melissa Devine, Johnston schools’ business manager, for the position of treasurer.

The other members of the board are Alex Prignano, the Cumberland schools’ business manager; Owen Bebeau, Woonsocket’s personnel director; Linda Celona, North Providence schools’ business manager; Lori Miller, Lincoln schools’ business manager; and, Thomas Bruce III, Cumberland’s finance director.

mreynold@projo.com