The Virginia Beach School Board heard a detailed presentation on Aug. 12 from division leaders explaining why employee and retiree health plan premiums will revert to 2022 rates for the 2026 plan year.

Superintendent Dr. Aaron Robertson and benefits staff said years of double‑digit claims growth, rising pharmacy costs and a run‑down health fund left the division with limited options. "As a self‑insured employer, both the division and employees must share in the cost of paying all health claims to keep the fund solvent," Robertson said.

Why it matters: staff, retirees and their families will see higher monthly costs at open enrollment and the board faces a tradeoff between using limited local dollars for higher salaries that increase retirement (VRS) or keeping benefits costs lower. The administration framed the change as necessary to avoid depleting the health fund and to match the city of Virginia Beach's current premium levels.

Key numbers and justification: benefits director Crystal Pate and Director of Consolidated Benefits Linda Mackens said the division contributed about $19 million to the health fund over the past two years (roughly $11 million in fiscal 2025 and $8 million in fiscal 2026). Mercer, the actuarial consultant, modeled trends assuming a 9% claims increase for the remainder of 2025 and for 2026. Under the scenario of reverting premiums to 2022 levels, Mercer projected a $200,000 deficit at the end of calendar 2026 but a $9.7 million surplus by the end of fiscal 2026; administrators said the desired reserve is approximately two months of gross cost (about $21.5 million).

Staff and union reaction: Heather Sipe, president of the Virginia Beach Education Association, described concrete examples of how the premium changes would affect educators at different salary steps, including that a teacher’s 4.5% raise could be more than offset by increased family premiums. "With the increased point of service premium of $2,403 for insuring myself and my two children, I would actually be taking a pay cut," Sipe said during public comment.

Options discussed and next steps: administrators said they will continue working with Mercer and monitor claims quarterly, and they recommended the board include the health‑fund situation and tradeoffs as part of next year’s budget deliberations. Robertson proposed soliciting staff feedback about priorities (larger salary increases that increase retirement benefits vs. lower out‑of‑pocket premiums) to guide board decisions. The board asked staff to present options for listening sessions, surveys and regular (quarterly) Mercer updates as the health‑fund picture evolves.

What was not decided: no policy or premium change was voted at the meeting; staff announced the premium alignment and presented the actuarial analysis. Any mid‑year employer contribution or alternative budget tradeoffs will require future board action.