By Geena Monahan—For the North Star Reporter
North Attleborough will transition its employees and retirees to the state’s Group Insurance Commission beginning Jan. 1, 2027, in an effort to stabilize rising health insurance costs.
The Town Council voted unanimously, 9-0, at its meeting on June 8 to approve an agreement negotiated between town officials and employee unions that will switch the town from its current self-insured health insurance model to the GIC. Officials budgeted the first six months of FY27 under the self-insured structure, with the GIC transition scheduled to take effect midway through the fiscal year.
The initial agreement runs for 3½ years, after which the town can reevaluate whether the GIC remains the best option.
Councilor and Finance Subcommittee Chair John Simmons said employees will see changes in plan offerings, but will have multiple options available through the GIC, including plans administered by Wellpoint and Harvard Pilgrim.
Under the agreement, employee premium contribution rates could gradually shift over time. Simmons said the long-term goal is eventually reaching a 70-30 split, compared with the current 75-25 split between the town and employees, depending on future GIC rate increases.
The decision comes as health insurance costs continue to strain the town’s finances. When Town Manager Michael Borg unveiled his proposed $121 million fiscal year 2027 budget in April, he identified health insurance as one of the biggest financial challenges, with projected increases approaching 20% and a structural deficit of roughly $2 million.
“This happens to really benefit everybody,” Simmons said. “There are going to be some changes, and I know people don’t like changes. But this is going to be better in the long run for both employees and the town.”
Councilor Mark Gould asked whether any unions opposed the change.
“(They were) One hundred percent for it,” Borg said.
What the change means
Under North Attleborough’s self-insured health plan, the town pays employees’ medical claims directly, rather than purchasing a traditional insurance plan. While that model generated savings when claims were lower, it also left the town responsible for rising costs.Â
The GIC is the state agency that administers health insurance and other benefits for state employees, retirees and participating municipalities. Joining the program moves eligible employees and retirees into plans negotiated and administered through the state.
According to figures presented, remaining self-insured under proposed FY27 rates would have resulted in approximately $22.1 million in annual premiums. Moving to the GIC is projected to reduce that amount to about $18.5 million.
The town’s share of those costs is projected to fall from roughly $16.58 million to $13.87 million and employee and retiree costs are projected to decrease by about $905,000 collectively.
Based on enrollment figures — 295 individual plans, 398 family plans and 319 retirees — it’s estimated the GIC could reduce annual costs by between $1.8 million and $2.7 million, depending on employee plan selections during open enrollment.
Council President Justin Pare asked if the town had previously participated in the GIC. Simmons said North Attleborough had not been a part of the state system. It left the Massachusetts Interlocal Insurance Association, known as the MIIA, in 2022 and moved to the self-insured model.
“We were able to see immediate savings for the first three years,” Simmons said.
Rising claims drive decision
A presentation showed claims exceeded projections by approximately $1.8 million in FY25, with another $2.2 million shortfall projected for FY26. Those overruns have required the town to rely on free cash to cover the difference.
Simmons said remaining self-insured would have required the town to allocate millions of additional dollars to health insurance in future budgets.
“If we had to stay with self-insured, we’d be looking at $3 million more of our budget into the health insurance line item,” he said. “That would have led to cuts in services somewhere.”
Instead, officials said the transition will free up budget capacity while maintaining current services.
“This is not cost savings. We are not saving money as a town doing this,” Simmons said. “We are freeing up money to be used elsewhere in our budget.”
Council Vice President Keith Lapointe said the transition reflects careful financial management.
“I was so impressed we were able to time the market on the front end and then time it on the back end,” Lapointe said. “It demonstrates fiscal diligence to be on top of it and make the move at the right time.”