Berkshire Health Group Sets Minimal Increase for Fiscal 2024
NORTH ADAMS, Mass. — More than 30 municipal entities that are members of Berkshire Health Group will see health insurance rates rise by 1 percent in fiscal year 2024.
But the impact for many could be closer to a 9 percent hike depending on how they budgeted for health insurance costs in FY23.
The board of the joint purchasing group Monday morning approved the 1 percent hike for the year that begins on July 1. But, unlike last year, there was no vote on whether to offer members a one-month "premium holiday" in the coming fiscal year.
Last January, the board voted an 8 percent increase over FY22 but, at the same time, approved a one-month holiday — essentially not billing members for 8 percent of the year — to lessen the blow to the towns and school districts served by Berkshire Health Group.
Those entities had the option either to to reflect the entire 8 percent rise in their FY23 budgets or to apply all or part of the premium holiday to the FY23 spending plan in order to keep health care costs flat.
After Monday morning's meeting in the conference room at McCann Technical School, BHG Board Chair Sharon Harrison of the Berkshire Hills Regional School District said she did not know how many group members, if any, chose to work the full 8 percent increase into the current fiscal year's budget.
The premium holiday in FY23 was funded from its surplus, which the group maintains to offset large unforeseen cost increases during the coming fiscal year.
The current surplus, as reported to the board on Monday, stands at $14.7 million.
For FY24, Joseph Anderson of Gallagher Benefit Services presented the board with three potential rate scenarios, showing what would happen with rate increases of 1 percent, 2 percent and 3 percent.
A 3 percent hike would have added a projected $550,000 to the Berkshire Health Group Trust, likely increasing its surplus. A 2 percent hike would have added $220,000. A 1 percent increase, as the board ultimately chose, lowers the trust's value by a projected $110,410 in FY24, cutting into the surplus.
"Basically, we'd be underwriting by saying we'll take $110,000 [from the surplus]," Harrison said prior to the vote. "I'd hesitate to underwrite more than this little bit.
"I don't think our goal is to add to the trust on the backs of group members."
The 1 percent increase was approved on a voice vote of the board members present with no dissenting votes.
In other business on Monday morning, the board voted to resume a practice, first instituted by Berkshire Health Group in 2019, of waiving co-pays for subscribers who utilize virtual "Well Connection" visits. Heidi Fountain of Blue Cross Blue Shield of Massachusetts told the board that while it had decided to waive the co-pays four years ago, members had begun to see bills after postpandemic changes by Blue Cross Blue Shield on July 1, 2022.
The board also decided to allow its coverage for members covered by PPO, or preferred provider organization, plans to align with changes Blue Cross Blue Shield has made to the number of outpatient short-term rehabilitation visits allowed in a given year. Currently those visits are capped at 100 per year, but BCBS is lowering that number to 60, Fountain said.
The Berkshire Health Group Board had the option of keeping its cap at 100 visits per year, but after hearing that a relatively small number of municipal employees in the group (fewer than 100) are on PPOs and an even smaller subset might exceed the 60-visit cap in a given year, the board decided to take no action and instead allow the lower cap to go into effect.
Berkshire Health Group covered more than 3,400 employees and retirees as of June 2022, which equates to nearly 5,700 people, including dependents. The governing board includes representatives of 11 of the group's larger entities, including the towns of Adams, Great Barrington, Lanesborough, Lenox and Williamstown and six regional school districts: Berkshire Hills, Central Berkshire, Hoosac Valley, Mount Greylock, Northern Berkshire Regional Vocational Technical and Southern Berkshire.
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