Do O22 switch outer terminal posts need electrically isolated from the switch body?

 I’m rejuvenating a PW O22 & had to drill out a terminal post that had broken off.  Do the terminals need to be isolated from the switch body, or do they use it as a ground?  It seems as though the plastic nut shaped hexagon piece that fits through the hole keeps the threaded terminal post from contacting the metal switch body.   

Thanks for any insight. 

Tom