Southampton plans move to state health plan; town flags mitigation payments and run‑out costs ahead of May 2 vote
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Summary
Town Administrator Scott Zaback outlined FY27 shared costs and said Southampton will join the state Group Insurance Commission (GIC), expecting multi‑thousand dollar savings for the town and employees but noting mitigation payments, potential run‑out claim costs and enrollment timing could change final figures.
Scott Zaback, town administrator for the Town of Southampton, summarized the town's fixed and shared FY27 budget costs and announced the town plans to join the state Group Insurance Commission (GIC), a change he said should reduce health‑insurance costs for both the town and employees but will require mitigation payments and budgeting for run‑out claims.
Zaback told listeners the town is still finalizing the budget ahead of a Select Board and Finance Committee meeting scheduled for the following night and warned that some figures could change before the town meeting on May 2. "We're gonna be joining the Group Insurance Commission this year, or better known as the GIC," he said, adding that the move "should save the town of Southampton several $100,000." He cautioned that final savings depend on which plans employees choose during GIC open enrollment (April 1–May 1).
Why it matters: moving into the GIC can lower premiums through scale but obliges municipalities to share a portion of savings with employees and to prepare for costs from prior, self‑insured programs. Zaback said the town negotiated mitigation payments to distribute savings to employees as required by state law and is also budgeting for possible run‑out claims owed to the outgoing Hampshire County Group Insurance Trust.
Key details: Zaback listed several line items in the shared expenses budget — postage, legal expenses (including work related to a bridge project with Easthampton), weights and measures inspections, street‑lighting costs billed by Eversource, and an annual PVPC contribution of about $1,200 for regional planning services. He said the town pays insurance for property, casualty and cyber through the Massachusetts Interlocal Insurance Agency (MIIA) and carries a separate Chubb policy for public‑safety personnel injuries, which he said costs the town about $145,000 per year under a short‑term rate guarantee.
On retirement and benefits, Zaback said the town will contribute roughly $1,200,000 to the Hampshire County Group Retirement system this year, an increase of about $50,000 from last year. Other personnel line items he named included workers' compensation (~$60,000) and self‑insured unemployment (historically budgeted at about $15,000).
Mitigation and run‑out claims: Because state law requires sharing a portion of transition savings with employees, Zaback said the town negotiated mitigation payments totaling about $32,500 in the first and second years (split over three years into employees' flexible spending accounts). The town also budgeted roughly $25,000 to begin covering run‑out claims from the self‑insured Hampshire County trust; Zaback said total run‑out exposure could range "anywhere from $50,000 to $150,000," but the final total will not be known until claims settle and may be spread over five years per state allowance.
Technology and operations: Shared IT costs — managed services provided by Novus IT, software licenses (Microsoft 365, VADAR, Nearmap), and a modest increase for website work — and an expanded e‑permitting system (named in the transcript as "permalink") were noted as recurring or growing expenses. He also cited town‑hall maintenance needs, including a failed Council on Aging sewer/vent pipe and HVAC and sprinkler repairs.
What’s next: Zaback urged residents to attend or watch the Select Board meeting where the budget is expected to be finalized and said he would post the approved budgets on the town website after the meeting. Final health‑plan cost impacts hinge on GIC enrollment choices, which close the day before the town meeting, he said.
Quotes from the presentation
"We're gonna be joining the Group Insurance Commission this year, or better known as the GIC," Zaback said. "It should save the town of Southampton several $100,000."
"The open enrollment for the GIC ... is gonna be April 1 through May 1. The problem is our town meeting is gonna be May 2," he added, noting the timing could leave some figures uncertain at the meeting.
Ending: The Select Board and Finance Committee expected to meet the next day to finalize the FY27 budget; Zaback said he planned to post the final budgets to the town website once they are approved.
