HATFIELD — Hatfield will remain part of the Hampshire County Group Insurance Trust, with elected officials this week opting against pursuing a competing proposal, despite another significant increase in health insurance costs.
The town is facing a 12.5% increase following last year’s spikes — which included a 20% midyear jump. Despite an alternative proposal from Shirley-based FernRock Insurance Agency, the Select Board voted Tuesday to maintain the status quo, following a narrow recommendation from the Insurance Advisory Committee.
The change in carrier would not have caused a change in the plan design, but could have saved the town $50,000. FernRock was proposing a 7.5% increase in health insurance costs.
Already, Hatfield is among the communities affected by changes to the trust’s plan designs, including moving to $250 and $500 deductibles for individuals and families, respectively.
Town Administrator Andrew Levine said FernRock is offering a self-insurance model, which received a split in reviews from members of the Insurance Advisory Committee, with three recommending the move, four to stay with the trust and one who could go either way. The Public Employee Committee, though, was more favorable to FernRock.
Levine said there are various pros and cons, including a different insurer and change in general, and while $50,000 is significant for the town budget, “at the same time the runoff costs could be large as well.”
Select Board member Luke Longstreeth said if Hatfield leaves the trust, it won’t be able to get back into it, and certainly not at the current rates being paid.
“I’d like to explore this more, unfortunately we need more time to look into it,” Longstreeth said.
While he was most favorable toward FernRock, Longstreeth said he also wanted to see how it’s working out for other communities and whether there truly are cost savings.
“Certainly we can’t keep seeing 20%, 40% year-to-year increases through the trust, and I don’t think any town that is part of the trust will continue to tolerate that, either,” Longstreeth said.
“Saving $50,000 is very nice, but if we have any runoffs from the insurance then we’ve lost that gamble,” said board member Greg Gagnon, adding that he was also reluctant to take a chance on losing excellent service from Blue Cross Blue Shield.
Chairman Ed Jaworski said staying with the trust for another year will give the Insurance Advisory Committee more time to look at alternatives. He, too, was concerned about realizing actual savings.
Anthony Lively, president and cofounder of FernRock, explained some of the benefits.
FernRock, he said, tries to structure plans to save the community and employees money, pooling risks but at a higher level.
“The main goal is we help members to better manage their health and have programs and tools available for them to do that,” Lively said.
Its proposal is no plan design changes for deductibles and co-pays, though FernRock uses Harvard Pilgrim Health Care and UnitedHealthcare outside of Maine, New Hampshire and Massachusetts.
