HATFIELD — Potential savings of around $220,000 are prompting the Select Board to explore moving town employees’ health insurance from the Hampshire County Group Insurance Trust to the state’s Group Insurance Commission.
The Select Board Thursday voted 3-0 to have the town’s Insurance Advisory Committee and the Public Employee Committee examine the possible change in insurance during a mandated 30-day negotiation period, with a required Dec. 1 application deadline set by the Group Insurance Commission.
If the change is reported favorably from the committees and the Select Board files a request to join the GIC, Hatfield’s 70 or so active public employees, which includes those working at the public schools and for municipal departments, would transition their insurance starting July 1, 2027.
“There’s a conversation to be had, but we should push it through the process,” Select Board member Julia Frisby said.
Town Administrator Andrew Levine explained at a meeting Tuesday that joining the GIC would realize the $220,000 in savings in the first year, though 25% of these savings would be passed on to enrollees to mitigate the inconvenience of having to change healthcare plans.
The potential change is supported by the town’s Deficit Reduction Committee, which has been exploring ways to deal with what is anticipated to be a $300,000 to $350,000 deficit in the fiscal year 2028 budget. That deficit exists even before anticipated increases that would be necessary to restore fire and ambulance service, reduce reliance on mutual aid ambulances from South County EMS and possibly enhance police coverage.
Levine said in the scope of the budget, such cost savings in insurance feel like they make a difference, but officials need to make sure the town still provides the best healthcare. Many unknowns remain, and dialogue among the employee committees is important.
“It certainly seems like a substantial amount of savings,” said Select Board Chairman Luke Longstreeth.
Levine said a change was previously discussed last year following successive 20% increases, including one midyear, from the Hampshire County Group Insurance Trust, which was facing financial challenges partly due to the increasing use of weight-loss drugs.
This year, the trust sought a 12.48% increase and has appeared to stabilize its finances under the guidance of the Hilb Group New England.
Danielle Chaplick, a consultant with Hilb Group, told the Select Board that the trust has been building reserves and making all necessary changes to eliminate GLP-1s, the weight-loss drug, negotiating stronger pharmacy terms and changing plan designs. This means the trust doesn’t need to impose another midyear increase, Chaplick said.
“Our goal was to stabilize the group,” Chaplick said. “It was pretty much, from a
financial standpoint, pretty close to insolvency.”
Hatfield had previously explored joining the Massachusetts Interlocal Insurance Association or becoming fully self-insured. Last spring, the Select Board received a presentation on self-insurance from FernRock Insurance showing possible savings of around $50,000 a year, but there were concerns due to the relatively small number of employees, with self-insured communities typically having at least 100 workers.
Levine said if Hatfield remains part of Hampshire County Group Insurance Trust, he is not worried, as it’s provided the best quality care at the right price. The issue is that a large number of communities are engaged in the trust but don’t have a mechanism for reducing costs.
The GIC has an HMO that is advantageous and generally will mean employees can keep their current doctors and continue to be covered, with the premium for individuals going down from $1,113 to $902 a month and with each individual’s out-of-pocket going down from $453 to $360 a month. Families will see a savings, as well, with their out-of-pocket dropping from $1,154 to $1,111 per month.
Younger workers who may only pay premiums because they are not seeking medical care should also benefit, Levine said.
“They’ll probably be better off in this Health New England plan,” Levine said.
Much of the information depends on which plans employees choose, Levine said. When Northampton and Monson changed, 85% went to Health New England.
GIC has a $500 deductible for individuals and a $1,000 deductible for families, which are both double the current $250 and $500 deductibles for individuals and families.
