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Westford finance committee weighs staying self-insured or joining state GIC to save millions
Summary
At a May 19 finance committee meeting, residents and the town's consultant debated whether Westford should keep its self-insured health plan with design changes or join the state Group Insurance Commission (GIC); the committee asked for more enrollment, cost-distribution and peer-town data before advising the Select Board.
WESTFORD, Mass. ' The Westford Finance Committee on May 19 reviewed a consultant's analysis of the town's employee and retiree health insurance and discussed two main paths to reduce costs: tweak the town's self-insured trust plan (including moving plan design toward the GIC''s benchmark) or join the state Group Insurance Commission (GIC).
Former Westford town manager Jody Ross, speaking during public comment, urged caution about switching plans and told the committee the town's health insurance trust has built sizable reserves. "Our reserves have been built to a healthy $5,400,000," Ross said, adding that the trust has the local control to tailor benefits for employees and retirees. She warned of financial risks if the town moved to the GIC, which she described as "nowhere near in the financial shape that our town's trust fund is." Ross also cited an estimated $1,000,000 in savings tied to Blue Cross Blue Shield no longer covering GLP-1 drugs.
Pat Bridal, the consultant from Locked In who prepared the report, told the committee the 2023 deficit in the trust was driven primarily by repeated large claimants and rising stop-loss costs while reserves were still being built after deferred COVID-era care. "We had a very large number of what's called large claimants," Bridal said, explaining that a relatively small share of members can drive large payouts and higher stop-loss premiums in subsequent years.
Bridal and town staff corrected and clarified enrollment figures during the meeting. Bridal said the most recent enrollment snapshot shows 96 non-Medicare retirees and 627 Medicare retirees (723 retirees total) and 519 active employees on the plan. That mix, Bridal said, means Westford currently has more retirees than active employees on the plan, a pattern that contributes to higher average claims.
The consultant also explained an important distinction: moving Westford's self-insured plan to the "benchmark" plan design used by the GIC differs from joining the GIC itself. "When you're self-insured, you are setting the premiums," Bridal said. Changing plan design in a self-insured model can shift costs to employees through higher cost sharing, but it does not guarantee the same premium savings the GIC can offer because the GIC pools purchasing power and presents a guaranteed premium to participating municipalities.
Committee members focused on three practical concerns: (1) how often large claimants could again push the town into deficit; (2) how many employees would fall into low, moderate or high use categories (to estimate employee out-of-pocket impacts); and (3) the fiscal mechanics if the town were to join the GIC, including runout claims, stop-loss costs, and what happens to trust reserves.
Kristen (a town official who briefed committees on the process) said the Health Insurance Trust will prepare any formal proposal for the Select Board and that the town will present the consultant's findings to the Insurance Advisory Committee (IAC) on June 3. She also said she is contacting managers in other GIC towns to collect experience reports and noted that statutory rules require a mitigation fund equal to 25% of first-year savings be set aside to help offset transition impacts.
The consultant's report included a directional estimate of roughly $3.5 million in total savings from a GIC move; Bridal and town staff emphasized that the number is a snapshot dependent on enrollment, plan choice and future claims experience. Bridal advised that runout claims and stop-loss payments tied to the current self-insured plan would need to be paid from the trust if the town moved away from the plan.
Committee members agreed to gather follow-up items for the Select Board and Health Insurance Trust, including a clearer distribution of employees by utilization category, a side-by-side chart of effort vs. potential savings for tweaking the self-insured model versus joining the GIC, and peer-town experience reports. The chair asked members to forward outstanding questions in writing so staff and the consultant could assemble answers for a future meeting.
On routine business, FinCom approved minutes from its March 28 and May 11 meetings by roll call vote, 5-0, and then adjourned.
