AMHERST — Municipal workers in Amherst and public school employees in Amherst and Pelham will be paying higher rates for health insurance as town officials work to protect the health insurance trust fund.
A projected 10 percent increase in the monthly premiums, beginning Oct. 1 for those enrolled in the HMO and PPO individual and family plans offered by both Blue Cross and Harvard Pilgrim, is necessary because the trust’s reserves are at a potential danger point, Town Manager Paul Bockelman said.
“We have adequate reserves, but adequate is all we have,” he said.
Estimates show that the town needs to find about $250,000 that can be put into the trust fund, he said.
The town attempts to maintain at least $2 million in reserves at all times, enough to pay all bills.
Bockelman said the reserves are needed because of a “fair number” of what he describes as “very high cost claims” that are coming from employees.
Projections show that Blue Cross and Harvard Pilgrim’s family PPO would rise from $436 to $480, PPO individual would go up from $182 to $201, HMO family would increase from $255 to $280 and HMO individual would escalate from $106 to $117.
These new rates will go into effect in the fall, which Bockelman said is a safer time to do that than waiting until Jan. 1.
“We’re trying to keep it from getting worse,” Bockelman said.
The town will also have to come up with its share of the increase, likely around $250,000, based on being responsible for covering between 75 and 80 percent of these premiums. The exact sources for this aren’t yet known, but Bockelman said he will not ask Town Meeting for the money or to put burden on taxpayers.
Bockelman said officials may have to explore a plan design change for the long term.
Amherst has long benefited from being self-insured. In 2013, the town was able to have a health insurance premium holiday, meaning that the employees did not have this payment withdrawn from their paychecks that month, and the town and schools combined saved around $285,000 by not having to make the match. That came at a time when claims were down.