At the Jan. 15 meeting, Needham Finance Committee members reviewed townwide expense items that the administration projects will rise in FY26, including group health insurance, OPEB (retiree health liability) and retirement assessments.

Staff said group health insurance, joint‑venture and administrative costs are projected to increase 10.7% in the FY26 request; the administration based the placeholder on a 10% assumed rate increase and expects final carrier rates in March. The packet notes prior recent increases: in the latest year Harvard Pilgrim rose about 12% and Blue Cross Blue Shield rose roughly 8%–9% depending on plan.

Katie, finance staff member, told the committee the town has encouraged enrollment in high‑deductible health plans and provides an incentive to employees; about half of employees now choose high‑deductible plans, a split the staff cited as saving the town money. The administration and committee are also preparing an RFP for consultants to analyze alternatives to the town’s current shared purchasing arrangement. The study will be done jointly with Dedham and the West Suburban Health Group and is expected to inform FY27 budgeting.

Committee members and staff discussed a recent Tufts–Harvard change that required about 70 employees previously on Tufts plans to pick alternate plans, which may increase near‑term costs because the Tufts offering had been among the least expensive in that enrollment pool.

On retiree liabilities, the OPEB contribution is projected to increase 5%; staff reported Needham’s OPEB funded ratio at about 49% and said the town is targeting full funding by 2041. The town is using a 6.6% discount rate for OPEB assumptions for FY26 and is monitoring actuarial updates that could change FY27 estimates.

Retirement assessments (pensions) were described as rising by 8% in the packet; the requested appropriation figure cited in the meeting was approximately $14,400,000. The town reported a retirement funded ratio of 77.4% as of the most recent published data; staff said the funded ratio likely rose with recent market returns but final numbers will follow actuarial updates.

Other items noted: workers' compensation was projected to rise by 3.5%, and injury‑on‑duty reserve needs and classification and performance settlements were discussed in the context of upcoming police union negotiations.

Why this matters: benefit and retirement cost pressures are a large component of the town’s fixed costs and will constrain discretionary spending across departments during FY26 budgeting.