Select Board starts process to shift to new health insurance provider

SOUTHWICK — The Select Board approved severing the town's ties with the health insurance provider it has used for years to make way for it to negotiate with a new provider.

The decision aims to reduce the expected increase in the town's overall premiums and have town employees share less of the monthly premium cost, which is 50%.

"This was a required notice of change," said Select Board Chair Diane Gale after the meeting about the town's decision to drop the Hampshire County Group Insurance Trust, which has covered the town's employees for well over a decade.

She said the Trust had to be notified by April 1 for the town to change its health insurance coverage on June 30, the last day of the fiscal year.

There were two factors that motivated the change.

Last September, the Fire Department's Fire Prevention Officer Brian Schneider, presented a petition to the Select Board that was signed by 69 employees requesting it hold a Special Town Meeting to have residents decide if the town would pay more than 50% of employee health and dental insurance, which is the current split. The article passed.

But the other driver was a concern about the financial viability of the Trust.

In October, Chief Administrative Officer Nicole Parker said she believed it was poorly managed.

"I have zero confidence that it is being managed responsibly … I don't trust them," she said, adding that she's concerned the Trust could declare bankruptcy at any time.

According to the Athol Daily News, last July, members of the Hampshire County Group Insurance Trust voted to increase members' rates by 20%, effective Oct. 1, after being told the Trust was at risk of going bankrupt because of increased pharmaceutical and medical claims and the growing popularity of weight-loss drugs.

That meant Southwick town employees who subscribe to the town's health insurance had to absorb the 20% increase, which meant that the 50% of the premium they are responsible for paying had another increase tacked on in the middle of the year.

According to the Trust's rate sheet, a monthly insurance premium for an individual using an HMO jumped from $839 to $1,007, and for a family, it jumped from $1,953 to $2,344.

The Trust increased its premium again in early March by 12.4% and for the first time required a deductible of $250 for individuals and $500 for families.

Since the Town Meeting vote, Parker and Assistant CAO and Human Resources Director Nadine Cignoni have been working with a broker to find a health insurance package that works for town employees, most of whom belong to a union, and minimizes the expected premium increase.

Before the board could vote on the withdrawal, the town was required to communicate its intention to the town's unions for DPW, the Police and Fire departments, clerical employees and library employees.

As for the search to replace the soon-to-be former insurance carrier, Gale said Cignoni and Parker have been looking at some "very good options."

She said Cignoni and Parker had reviewed some plans that were very comparable to the Trust and "equitable where they are looking as far as coverage."

However, she said health insurance costs are rising nationally, so an increase should be expected.

During the Special Town Meeting, many of the residents who spoke in favor of allowing the town to change the 50/50 split wanted to know what the new percentage might be, like 70/30 or 80/20.

Gale said it's still too soon for that to be determined, and those discussions would be driven by the negotiations between the town's unions and the administration.

The collective bargaining agreements for the Southwick Police Officers Coalition, the United Public Service Employees Union (clerical workers), United Public Service Employees Union (DPW), and the United Public Service Employees Union (library employees) all expire on June 30.

When Gale was asked about an estimated time it might take for those unions to reach agreements with the town, she said: "It took three years for the Police Department agreement to be reached."