EASTHAMPTON — After briefly clashing over how to negotiate the next steps to absorb an incoming 12.48% health insurance premium increase approved by a regional trust, city unions and Mayor Salem Derby are close to an agreement on a path forward.
Easthampton is a member of the Hampshire County Group Insurance Trust, which includes 72 cities and towns, schools, and water and fire districts in the area.
The city is one of 27 members, including Westhampton and Williamsburg, to vote in late February against the trust’s plan for the 12.48% rate increase that includes plan design changes. Those members were overruled by the other 55 members who approved the increase.
The plan changes include increased rates and copays, the implementation of a $250 deductible for individuals and $500 deductible for families in fiscal 2027, and changing contracts with pharmaceutical providers.
At the request of its unions, Easthampton preferred an alternative option that would have meant a 16% spike in health insurance costs — an option that would have cost the city more money but that union members said would provide better coverage by keeping plan design changes the same.
City officials told the Gazette that Easthampton provides health insurance for approximately 379 employees, active and retired, excluding certain retirees. The city estimates it is facing an increase of close to $1 million after the trust raised premiums twice last year, and that does not include the just-approved increase.
At a City Council Rules & Government Relations meeting last Tuesday, union representatives of several city departments met with city officials including Derby. Many of the representatives present at the meeting sit on the city’s Insurance Advisory Committee (IAC). It consists of 10 union representatives that has overseen insurance changes for city employees for more than 35 years.
Derby explained at the meeting that The Hilb Group New England, an insurance consultant for the trust, advised members of the trust to adopt sections of state law following the vote — Sections 21, 22 and 23 of Chapter 32B of Massachusetts General Law — in an effort to streamline the union negotiating process and potentially save the city money.
Union representatives said the laws, if they had been adopted, would have stripped them of their collective bargaining rights.
Derby proposed to adopt these changes to the City Council, but after two different city meetings, the city and union representatives came to an agreement to table the adoption of these sections for now. The item is still on the city council’s agenda, but Derby said he will ask for it to be removed.
Instead of adopting the sections of state law, the two sides agreed that city employees on health insurance would receive a portion of the funds — likely in the form of a premium credit — that the city saved by the trust voting for a 12.48% increase rather than the 16%. That portion is currently being negotiated.
According to city documents, the total savings between the city and employees comes to approximately $335,000. In alignment with the trust, the city pays 75% and the employees pay 25% of the city’s overall health insurance costs. The city is estimated to pay $7.8 million for health insurance next year, depending if employees join or leave the city’s health insurance.
Union argument
Adopting the state laws became a flash point in the debate. The unions argued that the measures including Sections 21 and 22 of the chapter — including establishment of a separate union negotiating body called a public employee commission (PEC) — are unnecessary in Easthampton, since the unions have been able to successfully negotiate with the city for decades under the IAC.
“It [the IAC] has always been a unified group, there’s never been any hesitation, there’s never been any difficulty getting one union on board opposed to another union,” said local union member Jason Dunham at the Tuesday meeting. “All the unions understand the process and it works.”
After that meeting, both Derby and Dunham told the Gazette the city had productive conversations with the IAC and Derby said the “air was cleared,” as negotiations continue.
Derby explained that he was doing what was advised to him by the Hilb Group and the city attorney, to give the city the best options if the trust was to become insolvent. He emphasized that the city is not attempting to leave the trust currently.
“The meeting went well and we had really productive discussion with the IAC,” Derby said in an interview with the Gazette. “The city and the unions are fully ready to solve this issue.”
Concern was mainly shown by union members regarding Section 23, which would essentially allow the city to leave the current insurance provider with less oversight from the unions to collectively bargain in the process. Though, the other sections also have conditions that would change the current bargaining process through the IAC.
Even if the city is not attempting to leave the trust currently, union members said it is still possible, particularly if the sections would have been adopted, for future city leaders to attempt to, without bargaining with the unions.
Derby said health insurance costs are affecting the entire country and Easthampton is working to deal with the rising costs. “This is strangling communities.”
