WORCESTER — New federal and state mandates are helping to fuel a 9 percent increase in the city’s health insurance costs for its employees and retirees.
With the city in the process of setting premium rates for the fiscal year beginning July 1, municipal health insurance costs are projected to increase by $4.8 million — $1.8 million for the city side of government and $3 million for the public schools — with mandates responsible for most of the increase.
City Manager Michael V. O’Brien said the increased costs will need to be borne by city taxpayers. As a result, funding will have to be diverted from other municipal services to pay for the higher health insurance costs.
In addition, the manager said, another $1.6 million will have to be borne by employees and retirees, who pay 25 percent of their health insurance premium costs while the city pays 75 percent.
“This increase is primarily due to new federal and state medical coverage mandates,” Mr. O’Brien wrote in a report that goes before the City Council Tuesday night.