Board hears detailed options for employee health insurance; staff recommends governor's budget as base and flags insurance reserves

Roanoke County Schools finance staff presented fiscal 2026 budget scenarios at the March 13 work session and recommended adopting the governor's proposed budget as the board's working base for next week's regular meeting. Staff emphasized that employee health insurance is the most significant financial exposure in the draft budget.

"Health insurance really is the big ticket. We just have some some sick folks out there, and we are, covering their their insurance costs," Susan Peterson, a Roanoke County Schools staff member presenting the budget materials, told the board, summarizing updated claims and a projected June 30 deficit. Peterson reported the June 30 health-insurance shortfall was "back to about $633,009.39" based on the most recent claims update.

Staff outlined three broad plan options discussed during the session: lower-deductible plans (the $1,000 option), mid-level plans (a $2,000 option offered as either a PPO or an HMO), and a higher-deductible Health Savings Account (HSA) paired with a $3,400 deductible. The staff presentation showed premiums tied to each option and noted the budget materials in the board book were prepared assuming the board selects the plan set labeled "Option B." Peterson said the premium changes would take effect July 1 and that open enrollment materials must be ready before open enrollment begins in April.

Staff also reported results from a short survey about a virtual benefits counselor program: 760 employees responded to the survey, 663 of those respondents were on the district's insurance, and about 21 percent of insured respondents said they used the virtual counselor last year (roughly 141 users). Peterson said the district paid more than $37,000 for the program and, given low usage and awareness (41 percent of nonusers said they were unaware of the tool), staff were considering pausing or reducing that expense.

Board members discussed trade-offs between using a one-time state bonus to shore up health reserves versus applying the state bonus directly to employees. Staff said the state has proposed a one-time bonus that would be restricted to bonus use; staff noted the district would not be required to fully match the state amount and could allocate the state allotment across full-time-equivalent positions instead. Board members asked staff to model multiple scenarios showing how applying the state allotment to health reserves or as payroll would affect the district's health-insurance reserve and premium-setting.

Members raised concerns about provider networks for the HMO option. Peterson said the HMO (HealthKeepers) network was built from providers the district's consultant identified as being used by employees, including many out-of-state providers the consultant had reviewed with the insurer Anthem; however she cautioned employees that some providers could be out of network and would face higher out-of-pocket costs if they chose an HMO and subsequently needed an out-of-network referral. Board members urged staff to re-check provider lists for retirees and out-of-state users.

Staff described recent enrollment migration: the district had about 40 percent of insured employees on the $2,000 plan after last year's choices and estimated approximately 1,500 employees participate in district insurance. Peterson said staff used an aggressive migration assumption for the high-deductible HSA option (reported as 35 percent in the session but with a notation staff would double-check and circulate the exact migration breakdown). The session also recorded about 83 retirees who remain on district insurance for planning purposes.

Budget figures in the work book were prepared assuming Option B for insurance; Peterson said she would revise the published numbers if the board decides to adopt a different insurance configuration before next week's regular meeting. Board members expressed concern that offering many plan choices (four or five plans) would make forecasting migration and maintaining reserves more difficult; several members said three plans is more manageable for accurate budgeting.

No final vote on the budget or insurance design occurred at the March 13 work session. Staff recommended adopting the governor's budget as the working base and returning to the board in April or May with revised numbers if the General Assembly or local revenue-sharing decisions change. Staff will provide scenario runs showing how the state allotment, potential bonus options, and different plan mixes would affect the health-insurance reserve and premiums; open enrollment materials must be finalized in time for the April enrollment period.