Finance Committee supports paying more than 50% of employee health insurance costs

SOUTHWICK — The Finance Committee unanimously approved sending a positive recommendation to next week's Special Town Meeting supporting Article 1, which is a request by the Select Board to pay more than the state minimum of 50% for town employees' health insurance premiums after the chief administrative officer explained what happens if the article is approved.

However, just how much more the town might end up paying for carrying more of the insurance burden will remain an unknown until town administrators begin contract negotiations with the police, DPW and clerical workers' unions. Their three-year contracts expire in late June.

"So, the thought process is they'll get permission to open that door," said Finance Committee chair Joseph Deedy when explaining the process during the committee's meeting on Tuesday. "The union and Selectmen slash [CAO] Nicole Parker will then negotiate that out."

"Yes, exactly," Parker said at the meeting.

"You don't get to vote on the percentage, just whether or not it can go up more than 50%," she added.

That prompted committee member Karen DeMaio to ask if the percentage increase might also increase during union contract negotiations in future years, which was a question asked by other committee members during the meeting.

"OK, so if this passes, does that allow for every time a contract comes up, it gets negotiated, and it can keep going up? Or is it just a specific, OK, instead of 50%, now it's 70%, and that's where it stays?" she asked Parker.

She answered that "technically," it was possible for the percentage to increase as union contracts are renegotiated over time.

Later, Deedy asked a similar question.

"Technically, we're not locking that number in year to year. Like, right now, it's 50-50, and it's locked in because of the state's minimum. So, realistically, every year, that could be a roll of the dice," he said.

"Hypothetically, yes. Realistically, no," Parker said.

"We don't lock it in, unfortunately. Like now it's locked at 50-50," he said.

Parker said it would be locked in during the contract negotiation starting in a few months.

"When we lock it in, it's going to be locked in," she said.

She explained several times the importance of having "fiscally responsible people" negotiating and settling on a percentage.

"You hope you have fiscally responsive people in place, or they shouldn't be in the place that they're in if they're going to start being completely irresponsible and [spend] you right out of your budget. You have to know that I'm constantly thinking about … we need to be fiscally responsible with our public money," she said.

Committee member David Methe wanted information about how a possible rate increase would affect taxpayers.

"Are you or is the board or somebody that's putting it forward going to have examples of what [increasing the percentage] might mean, like a certain rate change might mean this in terms of the overall budget, or to the tax rate," he asked.

Parker said she was expecting that question and answered it, as she said she would during the Special Town Meeting.

"What we do know, what I do know, is for each percentage point … it would go up $22,000 … [which] on our budget is negligible … it's nothing. When you start compounding the percentage … if we went up 10% that would be about $4 per month on the average household," she said.

What she didn't know was what health insurance costs would be in the future.

"I can only know what we pay today. I don't know what insurance companies will negotiate into the future," she said.

Deedy mentioned that the town had information about the benefits to the employees of increasing the percentage.

On the Town Clerk's page on the town's website, there is a copy of a brochure — The Importance of Competitive and Affordable Employee Benefits — that will be handed out during Tuesday's Special Town Meeting, which starts at 6 p.m. at Southwick Regional School.

In it is the reality of town employees who rely on the town for health insurance.

"In Southwick, even with an annual 3% pay increase, higher insurance costs result in a deduction of employees' take-home pay," Deedy said.

In 2026, town employees who opt for the HMO family plan will pay $1,444 a month for coverage — $503 for individual coverage, which is a 20% increase from the previous year, respectively.

The brochure lists several important facts, including the town employee insurance premiums in advance. "As a result, new employees on board with a cost due for their benefits that begin on their start date — before receiving their first paycheck," Deedy said.

Also, some town employees qualify for premium assistance through MassHealth, and others work second jobs to access more affordable health insurance through another employer.

The Finance Committee approved recommending voters approve a similar measure regarding the health insurance premium split for town employee retirees with at least 10 years of service.

It also recommended voters approve using $220,000 of free cash needed to complete the new public safety radio system. Free cash was recently certified. It is 4,527,287.