Overview:
The town of Orange in Massachusetts is exploring options for providing health insurance to its employees after facing a $336,000 shortfall in its health insurance appropriation. One option is to pursue health insurance through the Group Insurance Commission (GIC), a quasi-independent state agency that provides and administers health insurance and other benefits to the state's employees and retirees.
ORANGE — The Selectboard has authorized the town administrator to pursue the possibility of Orange joining the state-offered health insurance program, while also exploring other options in hopes of saving money amid rising costs.
Matthew Fortier had previously mentioned that the town will come up $336,000 short on its health insurance appropriation amid rising expenses, leading Orange to begin exploring other avenues for providing health care to town employees. Orange, which gets its insurance through the Hampshire County Group Insurance Trust, is expected to pay $2.66 million for the fiscal year after members of the trust voted on July 30, after the new fiscal year had begun, to increase members’ rates by an additional 20%. However, only $2.33 million was budgeted at Orange’s Annual Town Meeting in June.
One option for the town is to pursue health insurance through the Group Insurance Commission (GIC), a quasi-independent state agency governed by 17 members to provide and administer health insurance and other benefits to the state’s employees and retirees, as well as their dependents and survivors.
“Essentially, what I did was I took the data that the state had for enrollment in every plan, and then I did cost-weighted averages,” Fortier explained at last week’s Selectboard meeting, “which is where you figure out what percentage of people take which plans, and then you create a cost per plan, and then you come up with what essentially is the overall theoretical cost of an actual plan.”
Fortier said whenever a municipality joins GIC it must offer employees all available plans, not just the ones that are less expensive than previous options. Still, Fortier said he thinks there is potential to save money by switching to the GIC.
“We would be in a bigger insurance pool, so you’d have less exposure to risk. When the GIC is short on money in a given fiscal year, they get bailed out by a supplemental [state] budget bill,” he said. “If they have more, if they over-budgeted, like they didn’t need as much money coming in, then that surplus goes back to the state revenue. So [it] sort of washes out.”
Fortier had previously explained that the state Legislature in May passed a $240 million supplemental budget to provide emergency funding to the GIC, which was on track to run out of money. The town currently gets Blue Cross Blue Shield through the Hampshire County Group Insurance Trust and insures 280 employees, with about 60% of those working in the school system.
“Under the current Group Insurance Trust, we offer individual plans, employee-plus-one plans and family plans,” he said last week. “In the GIC, they only offer individual plans and family plans. And then the … average savings comes to $8,000 a month. So then if you apply the 70% that the town pays, you’ll see your potential savings.”
If the town ultimately decides to move in this direction, Orange would not be able to change its insurance until July 1, Fortier noted.
Selectboard member Jane Peirce previously said she has insurance through GIC and called the coverage “excellent.” In 2017, she retired from the state Department of Environmental Protection as deputy director of municipal service overseeing federal Clean Water Act funding. She was then a part-time contractor working in the department’s drinking water program until 2022.
Member Mike Bates, a veterinary technician at the University of Massachusetts Amherst, also said he receives great coverage through the agency.
