Ways to lower town employee health insurance costs being explored

SOUTHWICK — Select Board Chair Diane Gale didn't rule out having the board call a Special Town Meeting to have residents weigh in on whether the town should pay more toward the town employee health insurance costs than the current split, which is 50/50, during the board's meeting Monday night.

"I don't believe we said no to a Special Town Meeting. We need time to put that package together to make a decent presentation," Gale said after the Fire Department's Fire Prevention Officer Brian Schneider, who is speaking for all the town's employees, again addressed the board about health insurance costs.

On Tuesday, after the meeting, Chief Administrative Officer Nicole Parker was more emphatic about the Town Meeting question.

"We will have a Special Town Meeting," she said.

But as she, and Gale, said last week and Monday they want to put together a presentation for the meeting that will convince residents the importance of adjusting the split.

"We need the time to put that package together to make a decent presentation for Town Meeting," Gale said Monday, which Parker confirmed Tuesday.

She recognizes the needs to be a "better split, but we also need a better company."

That company is the Hampshire County Insurance Trust, which offers health insurance to 73 member towns and cities.

On Oct. 1, its members, including Southwick, will see a 20% increase in their premiums.

Parker's issue with Hampshire County Insurance Trust is that she believes it is 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 Greenfield Recorder, the trust's Executive Director Joseph Shea told members in July that the trust's reserves had dropped from $20 million in January 2024 to less than $5 million, and given the trust paid out $8.5 million in medical claims in May and then $2.9 million in pharmaceutical claims in July alone, action needed to be taken (raising rates) for it to be able to pay expenses and rebuild reserves.

Shea said the trust was at risk of declaring bankruptcy because of increased pharmaceutical and medical claims, and the growing popularity of weight-loss drugs, according to the Recorder's story from Sept. 17.

With that perhaps looming on the horizon, Parker said the town has been exploring options with other providers, which was one of the concerns Schneider raised at Monday's meeting.

"We'd like to express our concerns about the potential impact of any change to our current health insurance. The coverage we have now is strong and reliable, and many of us depend on it for ourselves and our families … a lower-cost plan might compromise the quality of coverage, and we hope that cost-saving measures won't. come at the expense of employee health and security," he said.

He said the town's employees are hoping to have the town and the town's taxpayers cover 75-80% of the cost, as most other municipalities do.

Parker said the annual cost paid by a town employee for the family plan using the town's current carrier is $18,772, which the town matches.

She, and Nadine Cignoni, the assistant CAO and human resources director, are still waiting for the trust to provide what are called "loss runs," which is the town's risk profile that includes a history of claims filed.

Once they get them, Parker said the town will contract with a third-party vendor who can analyze various health insurance plans against the town's current coverage and cost.

Gale wanted to make it clear Monday the town is not looking to provide a plan with less benefits and/or higher deductibles.

"[It is] certainly not my intention to cheapen the plan. It is just to see if there are other cost-effective comparable or even better plans available," she said.

Schneider also asked the town to keep the employees informed and involved in the process.

"Before any decisions that are made that could affect our health insurance, transparency and collaboration will help ensure that any change reflects both fiscal responsibility and well-being of the talent workforce," Schneider said.

Gale answered Schneider's concern at Monday's meeting.

"I'm certain there's not going to be a decision made without reviewing it with the employees," she said, adding "that would just be … not good."