LEBANON — School districts on the New Hampshire side of the Upper Valley are facing double-digit employee health insurance rate increases for the next fiscal year.
As a result, some are planning to cut costs in other areas.
The average rate increase for the nearly 100 users of SchoolCare, a Manchester-based risk pool management provider, is 17.4%, Carolyn Cote, a spokeswoman for the nonprofit organization, wrote in an email.
The increases will take effect July 1, 2026, and will be reflected in the school budgets that communities vote on at annual school meetings.
“The rates reflect continued pressure from medical inflation, higher-than-expected utilization of services, and rapidly increasing specialty pharmacy costs/trends affecting health plans across New Hampshire and nationally,” Cote wrote.
The increases are on top of $30 million districts and municipalities across the state have been billed to get SchoolCare on firmer financial footing after higher than expected expenses for the past few years led to a projected $4.5 million deficit for the current fiscal year. Those payments are due by Jan. 1.
In the Upper Valley, Lebanon, Hanover, Dresden, Mascoma, Haverhill, Cornish, Claremont and Plainfield are among the school districts that have been affected.
Lebanon
Lebanon will see a 19.6% premium increase in its most-utilized plan through SchoolCare in the coming fiscal year, SAU88 Business Administrator Tim Ball wrote in an email. The district also offers two other plans, which also will have double-digit increases.
As a result, the district will pay an additional $1.5 million for employee benefits — with $1.15 million attributed to health care increases — for the next fiscal year.
In previous years, the increases typically were under 10%.
For example, health care costs went up $370,000 for the 2025-26 school year. But that did not include the roughly $1.03 million that Lebanon needs to pay SchoolCare by Jan. 1.
The increase in costs is attributed to utilization, Ball said, adding that ” … the biggest factor of rate setting is how much health care people are consuming.”
The district has no immediate alternatives.
“… We cannot easily switch plans or ‘pay less’ as an employer, because the plans offered and the (percentage) of premium paid by the District is written into the (collective bargaining agreements),” Ball wrote.
It will take months for the district to explore other options to provide health care benefits to its employees, Ball said.
“Other options would include: switching to another risk pool, buying insurance commercially, or self-funding — either fully or in a ‘modified’ manner which gives the District some protection from catastrophic claims,” Ball wrote.
As the district explores options for the future, the board is working to develop a budget for next year. The proposed $58.56 million budget reflects a 6.93% increase over current spending. The majority of the increase is due to rising benefits costs.
The district is scheduled to hold a Budget Work Session meeting from 8 a.m. to 3 p.m. Saturday at Lebanon Middle School (3 Moulton Ave.) where district leaders — along with members of the public — can discuss the budget, along with potential cuts.
“We recognize that we will need to make difficult decisions about what to eliminate from this budget proposal,” Lebanon Superintendent Amy Allen wrote in a Nov. 14 announcement to Lebanon families. “However, rather than making unilateral decisions behind the scenes, we are bringing forth this proposal so that we can work with the School Board and our community to decide what to remove from the budget and what we need to maintain.”
Mascoma
The Mascoma Valley Regional School District — which includes the towns of Canaan, Enfield, Grafton, Dorchester and Orange — will have an average increase of nearly 27% in employee health insurance costs, Mascoma Business Administrator Michelle Lockwood said. That translates to a roughly $930,000 increase for the next fiscal year.
“We looked around,” Lockwood said in a phone interview. “There’s nothing that’s going to cause us a savings. Every other insurance company is getting increases as well.”
She noted that the numbers could change, as the district is in the process of negotiating a new contract with its teachers.
The nearly 27% increase from SchoolCare would have amounted to an overall 1.3% budget increase, which wasn’t acceptable for school leaders.
They got to work looking for cuts and found some, including leaving positions open, skipping furniture purchases and putting off projects, such as a planned renovation of the athletic fields at Indian River School, the district’s middle school, Isabelle said. The projected overall increase now stands at .96%.
The School Board and the Budget Committee will meet from 6 to 8 p.m. Monday, Dec. 1, at Mascoma Valley Regional High School (27 Royal Road, West Canaan) to finalize the proposed nearly $33 million general fund budget.
It is becoming more and more difficult for school districts, including Mascoma, to manage health insurance increases, Isabelle said. Last year, the district had a 13% increase.
“To incur an increase like this yearly is unsustainable for public school systems,” Isabelle said. “It’s very difficult to budget and put a bigger tax burden on our residents.”
Cornish/Plainfield
Other Upper Valley school districts that use SchoolCare are also facing increases.
Cornish will have a 16.4% increase with a projected $26,000 impact on the budget; and Plainfield will have a 25.6% increase with a projected budget increase of $580,000, Beth Bierwirth, who serves as business administrator for both SAU 32 in Plainfield and SAU100 Cornish, wrote in an email.
“The increase is significantly higher than in prior years,” Bierwirth wrote. “Last year, we averaged 8% between the two districts.”
Both Cornish and Plainfield are still working on finalizing their proposed budgets.
Plainfield’s budget committee will next meet from 10:30 to 11:30 a.m. Tuesday, Dec. 2, at Plainfield Elementary School (92 Bonner Road).
In Cornish, administrators are scheduled to present a draft of the budget at the Monday, Dec. 15 School Board meeting, which begins at 5:30 p.m. at Cornish Elementary School (274 Townhouse Road).
Dresden/Hanover
Between Hanover and Dresden, there will be an average increase of 25.6% in employee health insurance costs, according to Superintendent Robin Steiner of SAU 70, which oversees the Dresden, Hanover and Norwich school districts, said.
“The increase for Hanover will be approximately $680,000 and close to $1.3 million for Dresden,” Steiner wrote in an email. “We had budgeted for an 18% increase this year, which we thought was high.”
Hanover’s budget, which covers the elementary school, will be presented during a meeting scheduled for Wednesday, Dec. 10 from 6 to 7 p.m. at Ray Elementary School (26 Reservoir Road).
Dresden’s budget, which covers the middle and high school in Hanover, will be presented during a meeting scheduled for Tuesday, Dec. 16, from 6 to 7 p.m. at the Hanover High School Library (41 Lebanon St.).