North Attleborough Moves Employees to Massachusetts GIC to Cut Insurance Costs

North Attleborough will transition its employees and retirees to the Massachusetts Group Insurance Commission (GIC) starting January 1, 2027. This strategic move aims to manage burgeoning health insurance costs more effectively. The Town Council approved this shift unanimously during a session on June 8, after an agreement was negotiated between town officials and employee unions, moving from a self-insured health insurance model to the GIC. Initially, the town will allocate funds for the first half of fiscal year 2027 under their current self-insured model, with the GIC transition occurring midway through the fiscal year.

This new arrangement is set for a term of three and a half years, permitting the town to assess the suitability of the GIC at the end of this period. John Simmons, Councilor and Chair of the Finance Subcommittee, noted that employees will see changes in plan offerings but will have multiple options, including plans managed by Wellpoint and Harvard Pilgrim. The agreement outlines a gradual transition in employee premium contributions toward a potential 70-30 split from the current 75-25 split between the town and employees, subject to future GIC rate adjustments.

Escalating health insurance expenses have significantly impacted the town’s financial planning, catalyzing this move. When Town Manager Michael Borg presented the proposed $121 million budget for fiscal year 2027, he flagged health insurance as a significant financial obstacle, anticipating nearly a 20% increase and a structural deficit of approximately $2 million.

Under the self-insured model, North Attleborough directly covers employee medical claims. While advantageous when claims were lower, this model has become burdensome as costs rise. By joining the GIC, employees and retirees will gain access to state-managed and negotiated plans. This switch is expected to lower annual premiums substantially, with estimates suggesting a decrease from about $22.1 million to $18.5 million. Consequently, the town's share of costs is projected to fall from around $16.58 million to $13.87 million, and employee expenses could collectively decrease by approximately $905,000.

Projections based on current enrollment suggest that the GIC could lower annual costs by between $1.8 million and $2.7 million, contingent on employee plan selections during open enrollment. In 2022, the town opted out of the Massachusetts Interlocal Insurance Association (MIIA) in favor of a self-insured strategy due to initial cost savings. However, rising claims have prompted a reassessment of this strategy.

In fiscal year 2025, claims exceeded projections by $1.8 million, with another shortfall of $2.2 million anticipated for fiscal year 2026, necessitating the use of reserve funds to cover these deficits. Simmons stated that maintaining the self-insured model would require greater budget allocations potentially affecting other services, whereas the transition to the GIC provides budget flexibility while preserving current services.

Council Vice President Keith Lapointe commended the timely financial strategy, highlighting the importance of fiscal prudence in navigating the dynamic insurance market conditions.