Northborough reviews health-insurance outlook as broker projects renewal pressures

Select Board members and town staff spent the bulk of their Dec. 15 meeting examining the town’s employee health-insurance program after Boswell Insurance, the town’s broker, presented recent claims data and plan-design options.

Susan Boisvert, vice president at Boswell Insurance, told the board the town’s three-plan arrangement (two HMOs and one PPO shared with Southborough and the regional school district) presently shows a gross loss ratio of 108% and a net loss ratio of 98%, with a $170,000 stop-loss attachment. "Your gross loss ratio is a 108%," Boisvert said, explaining that a small number of very high-cost claimants drive much of the spending.

Boisvert and colleague Marcy Halloran said pharmacy spend—especially specialty medications—has been a large and growing component of claims. They noted that many carriers are removing GLP-1 drugs for weight-loss from coverage at renewal; Boswell said Harvard Pilgrim will no longer cover GLP-1s for weight loss as of the July 1 renewal and that removal of those claims will be reflected as a line item in the renewal calculation.

The broker gave the board a placeholder underwriting view that showed a 16% increase in premium for the July 1, 2026 renewal if current experience continued, but emphasized the figure is subject to underwriting discretion and negotiation. "Our risk management team recommended a placeholder of a 16% increase for July '26," Boisvert said, while adding negotiations and updated claims through December could change that result.

Board members and staff asked detailed questions about how the renewal calculation treats recent months’ claims and whether the carrier’s decision to stop covering GLP-1s would lower the renewal. Boswell explained renewals typically weight the most recent 12 months about 60% and the prior 12 months 40%, so recent coverage changes will be included but prior months remain in the rolling computation.

Discussion at the meeting also covered plan-design alternatives to manage costs and preserve access. Boswell outlined options including introducing a high-deductible HSA-qualified plan, with an illustrative rate about 21% lower than the town’s full-network HMO, and modest deductible additions to existing HMO plans (e.g., a $250 to $1,000 individual deductible) that could reduce premiums but would require union negotiation if current contracts are affected. The broker recommended funding a portion of an HSA deductible in year 1 to encourage enrollment while protecting employees who need care early in the plan year.

Select Board members asked staff to pursue additional pricing scenarios (higher deductible HSA options and variations in co-pays), to continue negotiating with carriers, and to begin employee education around HSA mechanics and tradeoffs. The board did not take a vote on changes at this meeting; staff said they will return with modeled plan options and clearer renewal pricing when the carriers issue formal renewals.