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Delaware County weighs replacing employee clinic and changing benefits broker to cut costs
Summary
County leaders discussed ending a long-standing IU Health clinic contract, negotiating with a new clinic vendor and switching benefits brokers in search of up to roughly $800,000–$1 million in 2026 savings; commissioners notified IU Health they will not renew and staff are negotiating a possible Marathon clinic contract but no deal is signed.
Delaware County Council members and county commissioners discussed a planned change to the county employee health clinic and benefits broker during a reconvened budget hearing, saying the move could significantly lower health-care costs for 2026.
The discussion focused on ending the county’s current contract with IU Health and negotiating a smaller-cost contract with Marathon, while moving benefits administration from Apex to a new broker, McGriff. Commissioners told IU Health they will not continue the current contract, but county staff cautioned they have not signed a new clinic agreement and negotiations with Marathon are ongoing.
Why it matters: the county pays a flat contract fee and usage costs for the IU Health clinic that commissioners estimated at about $500,000 in a base contract plus roughly $300,000 in additional usage and dispensing costs, for about $800,000 total in recent years. County officials said Marathon has proposed a lower first-year cost in the roughly $140,000 range if participation rates remain unchanged — a large one-time difference for the county budget.
County officials described three parallel savings levers being pursued for 2026: (1) moving broker services from Apex to McGriff, which officials said could yield $800,000–$1 million in avoided cost through lower premiums and reinsurance terms if negotiated successfully; (2) replacing IU Health with a lower-cost clinic model such as Marathon; and (3) increasing employee participation in the clinic, which county staff said is currently low. Commissioners and staff noted savings are not guaranteed and that the timing of negotiation and benefits-grid changes complicates budgeting for 2026.
County staff described the existing program and why they want change. Officials said clinic participation by county employees has been low — variously described as about 4%–10% in recent months — and that low use has reduced the clinic’s cost‑saving effect. A county description of the current IU Health arrangement said the county pays a $500,000 flat contract plus incremental dispensing and usage charges. A Marathon offer under discussion would instead be a per‑member monthly fee; staff said Marathon offered roughly $38–$40 per member per month in preliminary conversations and that an increase in employee participation would be needed to realize budget savings.
Staff also described parallel work on the benefits premium grid. County leaders said McGriff is negotiating with the county’s providers and reinsurer to cap administrative fees on large claims, adjust the premium grid to encourage preventive care, and perform dependent and spousal audits. The county currently funds a large share of premiums; staff said employees now pay about 7.6% of premiums on average and that modeling under discussion would shift employee contributions higher — possibly into the 20–30% range — while lowering overall premiums through broker negotiation.
Decisions and next steps: commissioners voted in a prior meeting to notify IU Health that the county will move in a different direction. Staff said they have not signed a contract with Marathon and will present a formal proposal if negotiations produce acceptable terms and service levels, including extended hours and telehealth. County staff said they will return with concrete McGriff premium grid results before finalizing 2026 budget assumptions.
Speakers quoted or recorded on the topic included Commissioner Henry (Commissioner), Stephen Brand (county commissioner's office), Jenna Kalin (executive assistant), Marissa (finance staff), Vanessa (benefits staff), and Matt (staff member). The council asked staff to present final negotiated terms and empirical premium comparisons before adopting a 2026 budget that assumes savings from broker or clinic changes.
Ending: County officials said the savings are plausible but not yet guaranteed. Staff recommended waiting for formal McGriff analyses and a written clinic proposal before counting the change as a 2026 budget reduction.
