Health insurance costs challenge Butler County’s local governments
Butler County’s municipal governments face increasing pressure on their annual budgets due to rising health care costs for personnel.
Health care spending by local governments has nearly doubled over the last 25 years. This financial burden is compounded because health care cost increases can have a delayed effect, potentially impacting municipal budgets for years to come.
As health care expenditures continue to climb, local administrations are grappling with the challenge of balancing employee benefits with fiscal responsibility.
Christian Laskey, Slippery Rock borough manager, said health care costs were a concern during planning for the 2025 budget. The borough provides health insurance coverage for seven employees and their families. For 2025, that coverage will cost $79,179.
“Our total health care expenditures went up a total of $24,179 in 2025,” Laskey said. “Enrollment numbers didn’t change, but the premiums increased by 43.96%.”
The borough managed to cover the additional expense without raising taxes. However, borough council didn’t rule out future increases if costs continue to climb.
Slippery Rock isn’t alone it its struggle to balance budgets amid rising health care costs.
Butler city clerk Mindy Gall said the city’s health insurance premiums for employees increased by 6% in 2025, representing roughly 9% of the 2025 total budget. Gall said the city reviews health insurance expenses and anticipated costs annually, with the next review scheduled for August.
Like other municipalities, the city explores strategies for balancing rising health care costs with other municipal priorities.
“During collective bargaining, the city requests higher contributions toward health costs,” Gall said. “Currently, employees contribute between 7 and 8% of the monthly premium.” One union agreed to cover 8% in 2025, 9% in 2026 and 10% in 2027, she added.
Another way the city reduced its health care insurance costs was by joining Municipal Benefits Services in 2018 for health, dental and vision coverage. MBS is a trust that provides health and welfare benefit programs for municipal employees. It serves more than 8,000 employees in 325 municipalities across the state. Gall said the move serves the city well.
Cranberry Township also belongs to an insurance trust designed to control health care costs for its 160 full-time employees. Cranberry’s 2025 budget calls for $2.6 million for health insurance, an 8% increase over last year. Township manager Dan Santoro said Cranberry joined Delaware Valley Trust in 2014.
“It’s a pooled, self-insured trust of municipalities and school districts,” he said. “It does save you money. The financials are invested right back into the trust, so it keeps those escalating costs down.”
According to information on the trust’s website, its management has kept average rate renewals in the single digits. Trust management has invested $86.7 million in the membership since 2004 through a rate stabilization fund. It further reduced premiums by more than $28.2 million through the application of multitrust discounts.
Besides the savings, Santoro said the other benefit of the trust is it insures through Aetna, which is accepted by both UPMC and AHN hospitals and providers. “Our employees don’t have to worry about switching doctors to stay within a specific network,” he said.
Health care consortiums and trusts aren’t always an effective strategy for lowering health care costs. Laskey said Slippery Rock explored joining a Pennsylvania consortium as a possible solution and discovered it would be more expensive.
Balancing rising health care costs with other municipal priorities has become more challenging, Laskey said.
“We have observed a rise in all borough maintenance costs, as well as annual increases in fees and supply expenses,” he said. “As a small municipality with a budget of $1.2 million, we strive to maximize the impact of each dollar spent.”
Laskey said a considerable portion of the borough’s funds is allocated to the public works and police departments — services Slippery Rock can’t reduce without compromising the community’s safety and infrastructure.
“Consequently, we are compelled to consider budget reductions in contracted services, administrative expenses, materials and supplies and capital purchases,” he said.
Santoro said reducing staffing isn’t a goal in Cranberry Township either because he doesn’t want to sacrifice the level of service the township provides, especially in the policy, utility, and public works departments.
“We provide a level of service our community has come to appreciate and recognize,” he said. “We’re going to continue to focus on trying to contain costs and look at all the options. You look at all types of cost containment, options to include employee sharing in premiums, and you just try to tighten your belt in other areas.”
Some smaller municipalities in the county have limited options for controlling health care costs. Many simply can’t afford to provide health care coverage for their employees. Allegheny Township is among them.
With an annual budget of around $400,000 and only three employees – two road workers and a part-time secretary/treasurer – it’s not feasible for the township to work health care coverage into the annual budget. What township supervisors agreed to do, instead, is provide considerable pay raises to help employees buy plans through the state health insurance marketplace.
“We looked at providing health insurance and discovered it was cheaper to have them get it through the marketplace themselves,” Supervisor Chuck Stowe said. “Even though we aren’t paying for insurance, we make up for it with higher hourly wages.”
This article first appeared in the February edition of Butler County Business Matters.
