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Committee hears 12% medical, 3% dental rate increases; health-insurance reserve at $1.4M
Summary
The Finance Committee was told the city's health-insurance trust stands at about $1.4 million and that medical premiums will rise 12% and dental 3% for the coming fiscal year; the committee kept the item on its calendar and asked for a full-council update.
The Gardner City Council Finance Committee on April 16 received an update on the city’s health insurance trust and proposed plan rates for the next fiscal year. The city’s health-insurance reserve fund balance was reported as roughly $1.4 million; the Insurance Advisory Commission was notified of a proposed 12% increase for medical premiums and a 3% increase for dental premiums for employees on city plans.
The mayor told the committee that staff reviewed multiple plan offers, including proposals from the Group Insurance Commission (GIC), Blue Cross, Fallon and others, and selected Blue Cross with a 12% increase after receiving proposal ranges from about 10% up to 26%. The mayor said keeping Blue Cross was intended to limit increases while maintaining coverage continuity. Open enrollment for employee plan selection will run May 1–30 to allow deductions and the school-department "balloon payment" process to occur without forcing staff to reimburse changes retroactively.
Why it matters: Health-insurance cost changes affect both city budgets and employee take-home pay. Committee members emphasized that Gardner’s employee contribution rate (cited in discussion as employees paying 25% of premiums) is a valued benefit and that insurance cost increases feed into broader compensation and contract negotiations.
Key points
- Trust fund balance: The fund balance was reported as approximately $1.4 million (the prior month was cited as about $1.7 million); recent claims reduced the balance.
- Rate changes: Committee was told medical premiums will increase 12% and dental premiums 3% for the upcoming plan year (effective July 1). The city evaluated other proposals with higher increases; Blue Cross was chosen at the 12% increase.
- Timing and payroll: Open enrollment is scheduled May 1–30 so that payroll deductions and the school department’s summer "balloon payment" can be calculated with the correct new rates to avoid retroactive billing to employees.
- Next steps: Committee voted to keep the item on its calendar and asked staff to provide a memo (already sent to the Insurance Advisory Commission) and to place an informational update on the full-council agenda.
Ending: The committee will forward an update to the full council and requested staff supply the committee and full council a briefing on the audit and insurance details at a future meeting.
