ATHOL – Town Manager Shaun Suhoski said a recent 20% increase in town employee health insurance premiums can be handled this fiscal year, but the next year could prove problematic.
Suhoski met with the Finance and Warrant Advisory Committee Sept. 9 to discuss how to handle these unanticipated – and substantial – increases. He said the issue needs to be addressed before planning for the FY27 municipal budget can get underway.
“The town faces a looming fiscal pinch-point as the trend of inflation and growing cost of services outpaces flat to modest gains in revenue,” he said at the Tuesday meeting.
Suhoski believes that $165,000 remaining in the health insurance budget can be used to cover this increase. However, this will not address anticipated premium increases for FY27, he added.
To plan for that, Suhoski said he will convene the town’s Insurance Advisory Committee (IAC) to determine if they should switch insurance carriers or stay with the Hampshire Group Insurance Trust.
Athol joined the insurance trust, which provides insurance for 72 western Massachusetts communities, in 2015.
The IAC will be made up of members of the town’s finance team, representatives of each of the four collective bargaining units, a representative of non-union staff, a retiree representative, and designees from the Selectboard and FWAC.
“Armed with market data,” said Suhoski, “the IAC and town management can determine the best option going forward based upon plan design and costs to the budget and employees.”
Suhoski also plans call for the town to negotiate and close union contracts for the next three years and reach similar agreement with non-union employees.
“That’s not just good for the employees, it’s good for us and you and the taxpayers,” he told the committee. “The one-year (contract) allowed us to manage a one-year shortfall in the revenue. A three-year allows us to plan.”
Suhoski hopes to avoid a Proposition 2 ½ override, adding that the town has been “able to extend existing (collective bargaining) contracts with 1% COLAs (cost of living adjustments) – while freezing all step increases – in order to balance its budget without layoffs and to provide a sufficient runway to deal with the issues in the FY27 budget cycle.”
Greg Vine can be reached at gvineadn@gmail.com.