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La Porte approves 1% funding increase for city employee health plan; stop‑loss reimbursements easing near‑term cost pressure
Summary
The Board approved a 1% increase in funding for the city’s employee health insurance renewal with Anthem and retained the existing stop‑loss arrangement; broker Brown & Brown reported the plan’s recent claims trended below underwriter expectations and multiple high‑cost claims are generating stop‑loss reimbursements.
The City of La Porte Board of Public Works and Safety on Aug. 5 approved a 1% increase in funding for the city’s employee health insurance renewal with Anthem, following a presentation from the city’s benefits broker and HR staff.
Brown & Brown broker Nick Napier told the board the city’s rolling 12‑month pharmacy and medical claims are “running at about $1,990,000,” and that the current period is about 86% of underwriter‑expected claims, down from roughly 98% in the prior 12‑month period. Napier said those trends, plus stop‑loss reimbursements, produced a firm Anthem renewal that raised expected plan cost by about 1.4% compared with current funding.
“We’re here to ask for your approval for the stop loss along with our renewal for Anthem,” HR Director Andrea Smith told the board when introducing the recommendation. Brown & Brown explained the city’s stop‑loss policy reimburses dollar‑for‑dollar for claims above $125,000 and that multiple members are already producing reimbursements that will return funds to the city’s reserve account through September.
Napier said Anthem’s initial renewal proposal was higher (about a 7.5%–8% increase on total expected cost) but negotiations reduced the final firm renewal to about $2,780,000 in expected cost for the coming plan year, an increase of roughly 1.4% (about $40,000) over the current plan year estimate. He described clinic contracting (Franciscan health clinics) and direct contracts for orthopedic and cardiovascular care as factors helping claims trend downward.
On funding, Brown & Brown recommended a modest funding increase rather than a rate hold to continue rebuilding reserves. The consultant said a 1% funding increase would add about $60,000 to reserves over the year if claims run at 100% of expected; holding rates steady would still yield a smaller reserve increase (roughly $31,800) if actual claims align with expectations. Council discussion noted the city’s current reserve balance and the legislature’s projected reductions to city budgets in coming years when weighing the recommendation.
Board members moved and seconded approval of the renewal and the 1% funding increase; the motion passed on an aye vote. City staff and the broker said they will follow up with an education rollout on the available direct‑contract programs and with additional details on a proposed MedZone clinical‑trial service for members with cancer or rare diseases.
The board’s action keeps the city on Anthem with the same stop‑loss arrangement and directs staff to proceed with the renewal and related member education and reporting.
