Gardner mayor outlines four health-insurance options as FY27 budget gap looms

Mayor Michael Mickelson told the Gardner School Committee on Monday that rapidly rising health-insurance costs are the principal driver of the city’s projected budget shortfall for fiscal 2027 and outlined four options to address the increase.

Mickelson said one option is to make no plan changes, which would result in a 12.5% rate increase. A broker-proposed alternative would keep Blue Cross Blue Shield but adopt the Group Insurance Commission benchmark plan; under that approach the city could lower the projected increase to about 10% and save roughly $300,000–$350,000 on the municipal budget.

Why it matters: Insurance increases have compounded over several years and are the largest single budget driver the mayor identified. The mayor said the city’s self-insured trust has absorbed past increases but that continued growth requires difficult choices, including staff reductions in the coming year.

Mickelson described the concrete design changes embedded in the broker proposal: individual medical deductibles would rise from $300 to $600; individual specialty co-pays would move from $35 to $60; family medical deductibles would increase from $900 to $1,000; and a new annual prescription deductible would be introduced ($100 per individual, $200 per family). He said those plan-design changes would reduce the projected increase from 12.5% to about 10%.

The mayor also outlined two other paths: leaving Blue Cross to join the state’s Group Insurance Commission (which would offer a menu of plans and different rate impacts depending on employees’ choices) and a fourth option that would seek deeper changes but requires unanimous agreement from all 12 municipal unions and therefore is difficult to implement.

Mickelson explained the decision process: plan-design changes or joining the GIC require a vote of a public-employee committee made up of union presidents and a retiree representative on a weighted-vote basis; retirees count for at least 10% of the vote under state law. By contrast, taking no plan changes would require only mayoral approval and notification to advisory bodies.

A decision "has to be made by May 1," Mickelson said, because plan-change notices and open-enrollment windows require 60 and 30 days respectively. He told employees and retirees the presentation and Q&A sessions would be recorded and posted to the city’s YouTube channel and encouraged feedback to union representatives and the retirees’ rep so the public-employee committee can act.

Quotes: "A decision has to be made by May 1," Mickelson said, summarizing the timeline. Superintendent Dr. Pellegrino earlier warned committee members that "there will be some staff cuts this year" as the district addresses FY27 budget pressures.

What’s next: The city will host information sessions, publish the full presentation online, and schedule insurance-advisory and public-employee committee meetings in the weeks ahead. The mayor asked employees and retirees to submit feedback to their union representatives and retiree representatives before the committee meets.