As health care costs rise nationwide, municipalities around the state are revisiting the question of whether to remain self-insured, or to switch to a state-run health insurance program for public employees that might help to cushion the financial blow.
Belmont is no exception.
“Every year we’ve either formally or informally revisited this and every year the numbers dictated against joining the [Massachusetts Group Insurance Commission],” said Select Board member Elizabeth Dione, before a vote earlier this month to begin the process for joining the GIC. “As recently as last summer, we thought that was still the case. It not only changed, it changed quickly and it changed quickly for everybody across the commonwealth.”
According to mass.gov, the GIC provides and administers high-quality, affordable health insurance and other benefits to the state’s employees and retirees. Presently, Belmont is self-insured, meaning it provides its employees and retirees with a Harvard Pilgrim Health Insurance. The town’s Health Insurance Trust Fund helps cover the year-to-year fluctuation in costs.
According to Town Administrator Patrice Garvin, the town could see as much as 5% in savings in health care costs by joining the GIC. Of the 5% in savings to the town, 25% would be returned to the employees through the Public Employee Committee process.
Also by joining the GIC, employees are offered multiple plan options from major carriers, according to Garvin. They can remain on Harvard Pilgrim or switch to a carrier with cheaper premiums.
“Rising health care costs not only impacts employees but has a significant impact on the town’s operating budget,” said Garvin.
Unlike past years’ discussions, Dionne said last week, moving to the GIC is now the more compelling option.
“Where it was compelling to stay out, it was never compelling to join it,” she said.
Of the roughly 50 communities, regional municipal districts, and regional school districts that are part of the commission, more than a dozen have recently joined, including Malden, Franklin, and Grafton.
“If the town is able to show at least a 5% savings … we’re able to do it through a vote of the Select Board and a highly regulated process,” said Select Board Chair Matt Taylor.
The vote taken at the board’s March 23 meeting enables the town to begin the process of switching health benefit plans, which involves negotiating with the town’s respective unions. Though the town would be required to enroll by July 1, the change would not be implemented until Jan. 1 to continue through June 30.
“The town’s fiscal budget for [fiscal year] 2026 is roughly $150 million when you take out the excluded debt,” Garvin said at a presentation March 11. “Health insurance is about 11% of that budget. To say it’s a major driver when there’s fluctuation within that budget line is an understatement. There are significant things that can happen that are sometimes just out of our control because this can be considered a national problem.”
One of the major drivers nationwide is the rising number of claims for GLP-1 prescriptions for weight loss, which, for members of the GIC, will no longer be covered. Other drivers include higher carrier, technical, and administrative costs, as well as staffing pressure in the health care industry. An aging population and increasing use of plans also contribute to the rising costs.
Garvin said there was a 4% premium rate increase in FY25, and 6% in FY26, resulting in $1.8 million and $2.8 million withdrawn from the Health Trust respectively. The projected rate increase in FY2027 is 24%, meaning an estimated $4.3 million would be withdrawn from the Trust on June 30, 2026.
Once enrolled, the employees would still be subject to the 24% premium increase until Dec. 31, 2026.
With last week’s vote, the next steps will be to negotiate with unions, negotiate with the Public Employees Committee, submit a notice of intent to join, complete pre-implementation steps, and “go live.”
