Westford trust to propose $950,000 transfer, explores plan changes and stop‑loss options

The Westford Health Insurance Trust agreed June 11 to present a proposal to the select board recommending the transfer of $950,000 back to the town and to continue studying several cost‑saving options for the town's self‑insured health plan.

Kristen Lass, town manager and chair of the trust, said trustees will bring multiple scenarios to the select board’s June 23 meeting but warned that “not everything is going to be solved in the next two weeks.” The trust asked Hub International to model the likely budget and member impacts of each option.

Dan (finance director) told trustees the trust’s May cash balance was $5,731,000 (cash only, excluding IBNR) and that the fund is projected to close June at about $6.3 million, partly because of a school lump‑sum payroll deposit. He and other trustees discussed the appropriate policy for an “adequate” trust balance; Lockton’s study suggested a guideline of three times IBNR, and Dan estimated IBNR at roughly $1.2 million.

Trust members said the $950,000 transfer could be presented as either a single payment or split into two (late June and early July) to mitigate the town’s near‑term budget needs while preserving trust solvency. The trust reached informal consensus to add that transfer among the scenarios it will present to the select board.

At the meeting Hub’s Mark Chrysetelli summarized several modeled scenarios that the trust asked him to analyze. Scenario examples included: (1) plan‑design adjustments aligned with benchmark plans (projected to lower expected FY27 costs by roughly $1.18 million in Hub’s model), (2) offering an alternative reference‑based pricing plan alongside existing Blue Cross plans (modeled net savings about $1.6 million under assumptions used), and (3) adding an HSA/high‑deductible option with employer HSA contributions (larger potential savings but greater risk of adverse selection).

Mark cautioned trustees that raising the stop‑loss specific deductible (the trust recently moved from $125,000 to $150,000) can reduce premiums but also increases the plan’s exposure if multiple members exceed the higher threshold. “If we have four people who reach $200,000, we’ve just taken on $200,000 in extra claims,” he said, noting the tradeoff between premium savings and tail‑risk.

Trustees also stressed process safeguards. Pam Hex (director of human resources) urged caution about cost shifts to employees and retirees, noting Westford is self‑insured and that raising deductibles or moving to an HSA could reduce premium income while increasing out‑of‑pocket costs for members. “When you touch one thing, it’s an unintended consequence on something else,” she said, urging the trust to preserve financial capacity to weather future claim volatility.

Select board member Sean Kelly asked the trust to (a) develop multiple cost‑saving scenarios, (b) benchmark Westford against comparable communities, (c) show impacts on employees (including retirees and cohorts of low/medium/high users), and (d) identify potential funds available to offset costs. Trustees agreed Hub would provide detailed scenario analyses and employee out‑of‑pocket illustrations for the select board packet, which will be posted in advance.

The trust set next steps: present preliminary material to the select board on June 23, circulate the packet by June 18, and hold a follow‑up trust meeting (options: June 24 or 25) to finalize any decisions. No formal vote to execute the transfer or make plan changes occurred at the June 11 session.

What’s next: The trust will submit the $950,000 transfer proposal and Hub’s scenario analyses to the select board on June 23; trustees will reconvene late June to decide whether to execute transfers or recommend specific plan changes.