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Health‑insurance consultant: Anthem renewal would rise about 15% while Virginia Local Choice quote could lower county cost
Summary
Franklin County’s health‑benefits consultant reported that the incumbent insurer’s negotiated renewal would mean roughly a 15% premium increase, while a later Virginia Local Choice quote would cut combined premiums and could save the county about $1 million compared with the Anthem renewal when dental and vision are included.
A health‑insurance consultant hired this year told the Board of Supervisors that an Anthem renewal would have raised Franklin County premiums roughly 15%, while an unsolicited Virginia Local Choice (TLC) quote that arrived after the RFP closed showed a decrease of about 5% compared with the county’s current plan.
What the consultant presented: Pierce Group Benefits, the county’s newly selected benefits consultant, ran a formal RFP for fully insured proposals. The incumbent carrier, Anthem, submitted a renewal that staff and the consultant negotiated down to about a 15% increase. The consultant said Anthem’s initial renewal had been substantially higher (about 24.5%) before the RFP and discussions.
Local Choice option: After the RFP closed a Local Choice quote (a state‑sponsored pooled option administered through the Department of Human Resource Management) arrived. Pierce Group reported that Local Choice’s quote would reduce combined premium versus the county’s current plan by about $275,000 and would lower the county’s portion by roughly $1 million when accounting for embedded dental and vision. Pierce Group stressed that Local Choice operates as a large pooled self‑insured program with underwriting rules and an exit (adverse‑experience) fee and that Local Choice sets enrollment and open‑enrollment dates for all participants.
Pros and cons discussed: Pierce Group said Local Choice generally gives participating localities more rate stability and often caps increases for a pool, but it also enforces tight enrollment timelines (open enrollment the first two weeks of May) and imposes a financial true‑up if a member leaves (run‑out or adverse experience charges). Pierce Group also noted Local Choice requires participating employers to contribute at least 80% of the employee‑only premium for employee coverage. The board discussed the tradeoffs between short‑term savings and longer‑term exit costs and the need to decide by a near‑term deadline if the county will pursue Local Choice for the July 1 renewal.
Next steps: Pierce Group and county staff asked the board to consider the Local Choice quote and to identify whether staff should proceed with a transition package and the required open‑enrollment schedule. Staff said they can implement either path but that a decision on Local Choice would require meeting the Local Choice paperwork and schedule by early April to satisfy May open enrollment.
