LENOX — Property owners hoping for a smaller tax increase for the next fiscal year will get their wish.
Thanks to a sharp downward revision in health insurance costs to cover town employees and retirees, including the public school district, budget scenarios are being reworked to factor in the savings following a crucial Berkshire Health Group board meeting last week.
As a “joint purchase group,” BHG insures Lenox and five other towns — Adams, Great Barrington, Lanesborough, Richmond and Williamstown — and six regional school districts, including Berkshire Hills, Central Berkshire, Hoosac Valley. Mount Greylock, McCann Tech and Southern Berkshire Regional.
nstead of the predicted 18 percent increase for health insurance premiums or the current year’s 16 percent, the board approved an 8.75 percent increase, said Melissa Falkowski, assistant superintendent of business & operations for the Lenox school district.
The impact on the health benefit expenditures in the Lenox school budget for fiscal 2027 is expected to result in savings of about $200,000, she said.
“The discussion at Wednesday’s BHG board meeting centered around the accelerating costs due to the rapid increase in utilization of GLP1 weight loss medications and whether the group wanted to continue covering these medications,” Falkowski told The Eagle. “The costs for the group to maintain those medications would have necessitated the much larger increase projected earlier by the School Department.”
The approved rate reflects cancellation of most coverage for those prescription drugs, Falkowski said after attending the meeting.
Employees and retirees will remain covered if the medications such as Ozempic and Wegovy are prescribed for Type 2 diabetes, the most common form of the disease.
She had originally projected an overall School Department budget increase at just below 11 percent.
Now, the anticipated spending request is likely to reflect a hike below 9 percent, although it’s still early in the budget season and other adjustments and revisions can be expected, Falkowski said.
School spending is expected to approach $20 million before offsets for revenue are factored in. The school district’s operating budget typically totals nearly half of total town spending.
About one in eight Americans were taking the GLP-1 prescription drugs for weight loss, diabetes or another conditions last fall, according to a study by KFF, the health policy organization.
Blue Cross Blue Shield and other insurers had previously canceled the coverage.
Massachusetts Interlocal Insurance Association (MIIA), the group insurer for other cities and towns in the Berkshires and statewide, also is ending coverage for the weight loss drugs.
The overall Lenox budget forecast is being updated this week by Town Accountant Anna Osborn. Details will be presented to the Finance Committee and the Select Board by Town Manager Jay Green later this month.
During what he termed “a high level” budget review at a Select Board meeting last month, Green offered a forecast for a “level service” spending plan that would provide no reduction in town services but with savings where possible.
He had cited health insurance cost increases as “the same old song, probably the biggest driver this year” for the town’s total spending plan.
Last week, he voiced relief at the Berkshire Health Group’s decision to cut its increase sharply from the anticipated 18 percent.
The town’s major projects — the completed public safety complex and road projects and the pending wastewater treatment plant rebuild — will require a $2.1 million annual payment through a “general obligation municipal bond.”
The town’s triple-A bond rating, the highest possible, helped lower borrowing costs through an interest rate of just over 3 percent.
But with a dedicated account to stabilize debt payments and by using a portion of the town’s $5.5 million in “free cash” primarily from hospitality taxes, the tax impact will be eased, Green noted.
All town staff will receive a 2.5 percent cost of living increase across the board. Green said. Staffing has stabilized, with no upcoming retirements expected, he added.