Berkshire Health Group to See 8 Percent Rate Hike in FY23
WILLIAMSTOWN, Mass. — The Berkshire Health Group Board of Directors on Monday voted to raise health insurance premiums by 8 percent for the fiscal year that begins on July 1 while offering a one-month "premium holiday" in FY23.
By a vote of 6-2 with one member abstaining, the board decided to raise rates for the 31 municipal entities served by the group. The 11 voting members of the group include the towns of Adams, Great Barrington, Lanesborough, Lenox and six regional school districts, Berkshire Hills, Central Berkshire, Hoosac Valley, Mount Greylock, Northern Berkshire Regional Vocational (McCann Tech) and Southern Berkshire; BHG also serves 20 smaller municipal entities who are affiliated with the joint purchasing group.
The board was advised by a representative from Gallagher Benefit Services that a rate hike was prudent to account for inflated health costs and a rise in claims after a fall-off in people accessing providers for non-emergency services during the height of the COVID-19 pandemic.
The board's consultant recommended four possible courses of action: an 8 percent increase with no premium holiday, an 8 percent increase with a premium holiday, a 4 percent increase with the FY23 funding shortfall partially offset by the group's reserve or no premium increase with the increased FY23 costs entirely offset by reserves.
"Option 3 is really the direction that I would point to to consider because it's the best of both worlds," Berkshire Health Group Treasurer James Kelley advised the board. "It leaves the trust in an extremely strong position with a lot of flexibility down the road. It also allows you locally to be in a manageable fiscal situation."
BHG Board Chair Sharon Harrison, the business administrator in the Berkshire Hills Regional School District in Stockbridge, told her colleagues that the proposed 8 percent increase was a shock to her but a one-month holiday from paying premiums would offset the near-term hike and allow the group to avoid larger rate increases down the road.
It has been a couple of years since Berkshire Health Group has passed a rate increase on to its member municipal entities. Last January, the board voted to keep rates level and give a one-month premium holiday in June 2021.
At Monday morning's meeting, Lenox Director of Human Resources Lyndsay Patenaude, representing the town on the board, moved that the board put off making a decision on the FY23 premium rate until representatives had a chance to put more thought into the decision. That motion failed on an 8-1 vote.
"My budget goes out next week, and health insurance rates are the last piece and, right now, the most important piece," Harrison said.
"I'd rather have more time to prepare for the worst than delay and have to end up dealing with it later, personally," Mount Greylock Regional School District Business Administrator Joe Bergeron said prior to voting on the motion to delay a decision.
Patenaude ended up voting in the minority against the decision to institute an 8 percent hike for FY23. So did McCann Tech Superintendent James Brosnan.
Brosnan said if he had his way, the group would keep rates level for FY23, knowing it has enough in reserves to cover increased costs, and deal with the rising expenditures in a future year.
"We can't go [to taxpayers] with, 'We're going to have a premium holiday,'" Brosnan said. "That's sort of voodoo economics. I have to fully fund my budget, as does everyone on this call. All that does with a premium holiday in May is spin that down and say, 'We have a little surplus now.' "
In the end, the majority of the board appeared swayed by Harrison's argument in favor of biting the bullet on an 8 percent increase in the coming fiscal year in order to avoid much larger hits down the road.
She referenced decisions the board made in the early part of the last decade not to increase the rate and instead use reserves. Those decisions led to "an almost 15 percent increase in one year" to bring the rates in line with actual costs, Harrison said.
"Right now, I'm feeling once bitten, twice shy," Harrison said. "I'm feeling we're at a point now where the rate increase is the rate increase, and we don't want to see 14 or 15 percent the next year."
Harrison, Hoosac Valley's Erika Snyder, Adams' Crystal Wojcik, Central Berkshire's Greg Boino, Southern Berkshire's Chris Desjardins and Bergeron voted in favor of the increase. Williamstown's Rachel Vadnais abstained from the vote. The towns of Great Barrington and Lanesborough did not have a representative voting at the virtual meeting.
In a separate vote Monday, the board decided unanimously on no increase in the group's dental premium for FY23.
An earlier version of this story said the premium holiday the Berkshire Health Group board voted at its Jan. 24 meeting was for fiscal year 2022. The board's vote was to give members the break on premiums for one month in FY23.
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