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Franklin County hears vendor reviews of PEB, pool and self‑funding options; VEBA contributions emerge as central issue
Summary
County commissioners heard two vendor presentations and a VEBA trustee briefing during a benefits workshop; consultants said Franklin County could consider level‑funding or self‑funding but must resolve high VEBA contributions and waiver behavior before changing funding models.
Franklin County commissioners and staff spent a workshop hearing presentations from two benefits brokers and the administrator of the HRA/VEBA trust on possible changes to the county’s health‑benefit structure, including pooled purchasing, level funding, partial and full self‑funding, and the county’s long‑running HRA/VEBA retiree‑benefit contributions.
Presenters and main points
Alliant (Sean Sicilia and team) reviewed options including the Public Employees Benefits (PEP) pool, Washington Counties Insurance Fund (WCIF), level‑funded programs and full self‑funding. Sicilia said the county’s current fully insured arrangement with Premera appeared competitive compared with published PEP rates and that joining a large PEP would involve tradeoffs in control and transparency. He recommended the county evaluate level‑funded or self‑funded solutions while addressing an outstanding VEBA contribution issue. “You could solve your medical program… but that’s 50% of your problem,” Sicilia said of the VEBA contributions and waiver rates; he urged modeling of VEBA changes alongside any move to self‑funding to avoid unexpected “migration” (waived employees re‑enrolling) that could raise costs.
Gallagher (Tamara Rogers, Greg Goldstein) gave a complementary walkthrough of fully insured, level funded and self‑funded approaches and also recommended detailed modeling of contribution strategies and bargaining‑unit impacts. Gallagher highlighted that the state risk manager requires review for some self‑funded arrangements (they quoted a 90‑day maximum review window) and that level‑funded contracts can serve as a transition to full self‑funding while providing reporting and a potential surplus return to the county.
Rich Dickman, administrator for the HRA/VEBA trust, described how the trust operates: employer‑directed funding, tax‑favored investment and reimbursement, common funding by leave cash‑outs or monthly employer contributions, and an expanded post‑death benefit under IRS guidance. Dickman said the county’s VEBA participants (about 620 accounts in the county data cited in the presentation) had an average account balance in 2024 of $19,217. He noted the trust’s asset‑based administrative fee (about 1% and tiered downward for larger balances) and said sick‑leave cash‑outs remain the most common funding source for VEBA accounts.
Commissioner concerns and next steps
Multiple commissioners said Franklin County’s VEBA contribution level — described in the meeting by a commissioner as about $1,567 per month for affected employees — appears high compared with regional peers and creates a fiscal strain. Commissioners asked for modeling that breaks out contributions, bargaining‑unit differences and projected migration if VEBA contribution levels change. Alliant and Gallagher both recommended building modeling tools to show the financial impact by bargaining unit and to jointly negotiate changes with employee groups to seek “win‑win” outcomes.
County staff and the vendors agreed on several practical steps: request more detailed claims and enrollment data from the carrier/TPA, secure modelled scenarios showing migration and fiscal impact by bargaining unit, confirm timing for any state risk manager approvals (brokers reported a typical maximum of 90 days for full self‑funding approval) and address VEBA changes in coordinated bargaining rather than as unilateral changes.
Why it matters: commissioners are weighing options that could materially change county benefit costs and who bears risk for claims. Vendors said Franklin County’s medical program performance suggests the county may be able to assume some claim risk (via level‑ or self‑funding) but that addressing VEBA contributions and waiver behavior is necessary to realize savings and avoid unexpected cost shifts.
What’s next: the vendors recommended additional modeling and data sharing. Commissioners asked staff to schedule follow‑up workshops and to supply the brokers with the county’s claims and enrollment data so they can return with numeric comparisons and modeled scenarios for negotiating with bargaining units and deciding whether to change brokers or funding approaches.
