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Supervisors approve FY2026 health insurance addendum; staff cite $11 million in three-year savings from RFP
Summary
The Fauquier County Board approved an addendum to its health insurance arrangement that steps toward separating school division medical funds while maintaining joint procurement; staff said recent RFP outcomes and plan changes are expected to yield just over $11 million in savings over three years.
The Fauquier County Board of Supervisors voted to approve and authorize execution of the FY2026 health insurance addendum, a management change that creates a dedicated health fund for the school division's medical, dental and prescription claims while preserving shared procurement and consolidated finance functions.
County staff said the addendum is year two of a three-year strategy to refill recurring funds to the school division's employer contribution up to $20,000,000 by FY2027. Staff warned that, even with the planned steps, the fund faces a projected shortfall that could be roughly $6,000,000 for the coming year.
Ms. Hilton, presenting results from a recent request for proposals, said negotiations limited the dental price increase to 2% and locked that rate for two years. On health plans, staff reported administrative-fee reductions, network access offsets, plan-design changes, wellness funds and pharmacy allowances. Ms. Hilton said improved prescription discounts, pricing and rebates, together with other negotiated changes, produce total anticipated savings of just over $11,000,000 over the next three years.
Several supervisors urged caution and called for clearer written terms. "I am concerned that it doesn't go into enough detail so that it's very clear that schools are gonna no longer have the county backing them, if they are unable to pay their bills," Supervisor Mr. Broadus said, noting previous county contributions of about $6,000,000 and $4,000,000 in earlier years and that the coming year was budgeted at $2,000,000 under the plan but may require additional support.
County staff clarified the operational effect of the addendum: while the school division's health-related revenues and expenditures will be tracked in a new, separate health fund, the fund will remain on the county's books and finance will continue to pay claims. "It's a step of management process, but not totally where the schools are out on their own managing their fund," a county staff member said, emphasizing continued joint negotiation of benefits while improving transparency for budgeting and committee review.
The addendum passed on a 4-1 vote. During debate the board asked staff to organize ongoing discussions about the transition, with at least one supervisor urging a task force of supervisors, school board members and staff to monitor the separation process and its fiscal impacts.
