Norwalk officials warn $3.3 million school health insurance cost pressure could double as budget season begins

NORWALK, Conn. — Health insurance cost pressure in Norwalk’s schools could double next year, officials said Tuesday as budget season began.

The warning came at a joint public hearing that opened the process for next year’s budget. Over the next eight months, city and school leaders will set spending limits, hold public hearings and vote on the plan in May. The dispute over who pays for teacher health coverage could shape those choices.

City Chief Financial Officer Jared Schmitt described a $3.3 million problem related to the Norwalk Federation of Teachers’ high-deductible HSA plan. He said the city and school district would manage the issue this year and that he hoped the teachers’ union would contribute.

In 2023, members of the NFT moved from state insurance plans to a Cigna high-deductible plan after teachers said their entire raise was absorbed by the increase in the state insurance plan’s cost.

Last year, the health plan’s cost jumped about 33%, instead of the 15% the district had budgeted for, adding roughly $3.3 million in employer costs to the school budget.

Schmitt warned the cost could double next year if it wasn’t addressed. “It’s a $3.3 million problem this year,” Schmitt said. “It’s going to be twice as bad next year if it’s not addressed.”

Board of Education Chief Financial Officer Lunda Asmani agreed.

Schmitt said it is too late to make big changes this year, but the city and schools would manage the issue this year together. He said he hopes the teachers’ union would help by offering a contribution.

During public comment, Mary Yordon, president of the NFT, said the board asked teachers to consider the state partnership plan several months after ratifying the 2026–2029 contract. 

After reviewing the options, “teachers ultimately voted to remain with the current plan because changing plans would affect provider networks and coverage without providing significant savings,” said Yordon.

Yordon argued they shouldn’t be expected to absorb more of the insurance cost: “We are partners in Norwalk Public Schools, but we are not the ATM.”

Tuesday’s hearing was only the first step in a long process, and no decisions were made on who will pay for the rising health costs.

What’s Next

The next step is mostly behind the scenes. Schmitt said city finance staff will spend the next two or three months working with department heads on their budget requests. After the city and school district review their needs and prepare recommendations, residents will have opportunities to comment at public hearings.

The public will get its next chance to weigh in at a comment session on Jan. 14.