Baker-Polito Administration Announces Group Insurance Commission Deferring $190 Million in Premium Payments for Municipal Members

The following is a press release from the Governor’s office.

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BOSTON – The Baker-Polito Administration announced today, July 1, the Group Insurance Commission (GIC) will defer $190 million in premium payments during the first quarter of Fiscal Year 2021 (FY21) from local cities and towns, regional school districts, and other entities that became members of the GIC through the Municipal Partnership Act.

This measure will provide important cash-flow relief to GIC municipal members across Massachusetts without compromising the GIC’s ability to pay all member claims without any impact on total FY21 revenue.

“By deferring these monthly GIC premium payments, we are providing relief to local municipalities that are facing budget challenges and cash-flow constraints due to COVID-19,” said Governor Charlie Baker. “We are pleased to implement this payment deferral and will continue working to support municipal budgets and government services that are important to the people of Massachusetts.”

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“Our Administration continues to seek ways to assist local cities and towns as we move forward with our phased reopening process and navigate the COVID-19 public health emergency,” said Lt. Governor Karyn Polito. “Working closely with our partners at the state and local levels, we are providing municipalities with resources and tools to protect public health, navigate the unique challenges caused by COVID-19, and ensure responsible governance.”

All FY21 revenues will be billed and collected later during the fiscal year. The total cash-flow relief anticipated as a result of the FY21 first quarter deferral is approximately $63 million per month or approximately $190 million total.

“We are continuing to coordinate with our state and local partners, and the Massachusetts Legislature, in order to promote economic stability during the COVID-19 pandemic,” said Secretary of Administration and Finance Michael J. Heffernan. “This premium payment deferral will support local cities and towns and provide them with much-needed cash flow relief.”

“As municipal leaders confront the extraordinary challenges from the COVID-19 pandemic, the GIC is committed to delivering value and supporting our municipal members,” said GIC Executive Director Matthew Veno. “Measures such as this reflect the GIC’s strong belief in this partnership with cities and towns at a time when preserving essential services at the local level is critical.”

This announcement builds upon additional measures put in place by the Administration to provide cash flow relief and budgetary support to municipalities.

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This includes making up to $502 million from the Coronavirus Relief Fund available to cities and towns for COVID-19 response efforts, as well as making up to $200 million from the Coronavirus Relief Fund available for costs related to reopening public schools, $194 million in federal Elementary and Secondary School Emergency Relief Fund grants, and $25 million in matching funds for remote learning technology grants.

The Group Insurance Commission is a quasi-independent state agency governed by a seventeen-member Commission.

It provides and administers health insurance and other benefits to 460,000 members including the Commonwealth’s employees and retirees, and their dependents and survivors, as well as participating municipalities, Housing and Redevelopment Authorities’ personnel, retired municipal employees, and teachers in certain governmental units.

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