State Health Plan Sees "Wave" as Franklin, Charles River Pollution Control and Others Join.

Thirteen municipal entities, including the Town of Franklin and the Charles River Pollution Control District that serves the town, plan to enroll in state Group Insurance Commission coverage in the upcoming plan year, as the agency weighs potential benefit changes to constrain rising health care costs.

Eight of the entities that filed letters of intent to join the GIC are currently members of the Hampshire County Group Insurance Trust, GIC Executive Director Matt Veno said Thursday.

The influx comes after the Dec. 1 deadline under a 2011 law for municipalities to submit paperwork that launches the plan transfer process for coverage that would take effect on July 1, 2026.

"This is the largest number of municipal entrants to the GIC since municipal health reform in 2011, so we're very excited to be welcoming and working with these 13 entities," Veno told the GIC board.

"It's a big year for us on the muni side," Veno added. "I would say I'm not super surprised at that, given the pressures that municipal and other budgets are facing when it comes to health care costs. I will also note that we did not have any of our current municipalities seek to exit the GIC, so we're continuing to perform our statutory function and be an option and a high-value option to municipalities."

At last month's meeting, GIC Government Affairs Manager Morgan Simko said dozens of municipal entities were mulling over abandoning their existing coverage and switching to the GIC. Heightened interest in the GIC came from Hampshire trust members, which saw their premiums rise by 20% in October.

Members leaving the Hampshire trust for the GIC include Bernardston, Chesterfield, Chesterfield-Goshen School District, Franklin Regional Council of Governments, Hampshire Regional School District, Leyden, Pioneer Valley Regional School District and Southampton, according to GIC Deputy Executive Director Erika Scibelli. Other entities joining the GIC are Malden, Grafton, Franklin, Charles River Pollution Control District and Oxford.

"I think the continued pressure on municipal budgets is going to likely continue," Veno said. "So I think we're going to continue to see an escalating interest over the coming years. It's not a small thing for a municipality to make the change to join the GIC. It's a great deal of work on their end."

The Regional Educational Assessment and Diagnostic Services Collaborative, which offers programs for school children with disabilities, is joining the GIC on Jan. 1, Scibelli said. Veno said the GIC has not added an entity in the middle of the year in a "long, long time."

Municipal entities that enroll with the GIC are committed to coverage for three years, said General Counsel Andrew Stern. Those entities can then renew for at least two years and are allowed to renew "for as many years as they'd like," he said.

Benefit changes are coming to GIC plans, as the agency that provides coverage for some 460,000 members searches for solutions to tamp down costs for fiscal year 2027. Surging costs from GLP-1 drugs contributed to the GIC nearly running out of money earlier this year, which triggered an emergency $240 million infusion from Beacon Hill.

"This is shaping up to be a very challenging budget year," said Veno, who noted Gov. Maura Healey is expected to file her proposed budget on Jan. 28.

"The budget challenge is real," he added. "We've been asked to do our part at the GIC to help prepare a responsible budget. That being said, the plan design and premium rates are ultimately the commission's decision."

The GIC board is in the early stages of discussing which benefits to adjust, such as increasing copays for urgent care and emergency room visits, increasing out-of-network coinsurance for plans that cover out-of-network services, and raising the surviving spouse contribution rate. The option to raise that coinsurance from 20% to 40% would impact behavioral health care, Veno said.

"We know that a lot of providers don't — therapists don't — take health insurance because they don't have to, and they can be reimbursed directly by members," GIC Director of Health Policy and Analytics Margaret Anshutz. "So there's a lot of out-of-network utilization in that space in particular, and that is who we're concerned with this particular benefit change hitting."

The GIC is considering raising surviving spouses' contribution ratio from 10% to what their deceased loved ones paid, which could be closer to 20% or 25%, Veno said. That change would affect "a little over" 8,000 spouses of state employees and 500 spouses of municipal teachers, he said.

New Commissioner Darren Ambler said he suspects that group's claims are "much higher than the average across the board." Board Chair Valerie Sullivan questioned whether surviving spouses use the GIC as their primary coverage "when they could be using Medicare as primary."

"It would be helpful if you are going to drill into that and it is something we could flex for saving money, let's do a real deep dive in those folks," Sullivan said.

Alison Kuznitz is a reporter for State House News Service