BELCHERTOWN — The Hampshire County Group Insurance Trust ended fiscal year 2026 $7 million in the positive, a little over $500,000 in reserves and far more financial stability than one year ago.
That’s a far cry from July 2025 when the trust announced that it would implement a midyear increase of 20% for its member towns as a way to rebuild reserves, which had dropped from $20 million in January 2024 to less than $5 million.
The 73 members of the trust — from municipalities and regional schools to fire districts — scrambled to find funding after the beginning of the fiscal year, and several members left for more stable pastures offered by other group health insurance managers for its employees.
Belchertown did not leave the group, but began investigating other options in case HCGIT’s downward trajectory continued. After a quick turnaround by the trust’s consultant, Hilb Group New England, the municipality appears to be back on board.
“I’ve been so impressed with the job that you’ve done after what we were faced with prior to you coming on,” Select Board member Nicole Miner told Hilb consultants at a July 20 meeting. “I went from having zero faith in the trust to having 100% faith in you guys.”
In February, the trust voted to raise rates by 12.48% for fiscal year 2027, lower than the previously predicted 16%. The decrease in expected rate increases was made possible through the addition of $250 and $500 deductibles and changes in the pharmacy plan.
“We’ve been working at warp speed,” Hilb Group consultant Danielle Chaplick said, “really turning over every rock and squeezing every lemon to correct the situation we inherited financially.”
Pharmacy costs and purchasing high-cost medications became a key driver of the group’s bleeding reserves. Particularly, the cost of GLP-1 medications, a class of prescriptions that help lower blood sugar and promote weight loss, for only a few hundred members comprised 30% of the entire pharmaceutical costs for the group, Chaplick said.
“This is something that we are going to actually look at year to year,” she said, “because pharmacy is changing so rapidly and there will surely be another iteration of GLP-1-like medications in the future that we really want to stay ahead of going forward.”
By altering the pharmacy plan and negotiating stronger contract terms with insurance carrier Blue Cross Blue Shield, the trust saved a total of $3.5 million. As of June 30, the group had a little over $7 million in cash balance, and conservatively projects it’s reserves to grow to $1 million in fiscal year 2027.
However, high claims are common in today’s health environment, and the trust’s self-insured system leaves it highly vulnerable to these fluctuations.
Previously, Miner had asked about stop-loss insurance, a type of coverage that protects against high claims. Specific stop-loss insurance applies to individuals with high medical bills, while aggregate stop-loss insurance covers the total claims of all 3,301 individual members.
“This is coverage that makes self-funding safe and feasible,” Hilb consultant Marianna Gil said.
Gil advised the trust keep its current specific stop-loss insurance coverage, where the trust pays $400,000 for a member and the carrier will pay the remainder. However, aggregate insurance is not necessary because claims have remained historically consistent and the member count remains high. At this scale, claims are highly predictable, making a aggregate breach extremely unlikely.
“It’s not just having, you know, extra knee surgery or anything like that,” Gil said. “It’s really having an incredibly large volume of very high-cost claimants combined with really unprecedented utilization for the aggregate to be breached.”
Select Board member Jonathon Ritter asked whether the trust had moved away from accounting on Excel spreadsheets and onto professional accounting software. According to the executive committee meeting minutes from July 22, Katherine LeBeau, accounting manager at Amherst College, was offered a part-time job as treasurer. If she accepts, LeBeau will work to move all financial information to new software, Gil said.
Over the next year, Hilb plans to transition its focus from short-term stability to long-term sustainability. Gil and Chaplick said they will look at multiple plan designs and claim costs to find further savings.
Miner requested the group add $500 and $1,000 deductibles, and promised to help educate employers on the flexible spending account, a healthcare-related spending account where contributions are not taxed.
Correction, July 29, 2026 10:14 am: This article has been modified to clarify the trust has $500,000 in reserves currently and projected $1 million in replenished reserves by fiscal year 2027. It has also been updated to include the correct name for Marianna Gil and clarified that the trust previously had specific stop loss insurance.
