Benefits committee hears rising claims, authorizes medical RFP; pharmacy rebates temporarily offset deficits

The Benefits Committee met April 19, 2022. Sean Fleming, presenter, reported that the city’s self-funded health plan is seeing higher-than-normal claims and announced that an RFP for the medical plan administrator will be issued this week, with the RFP open for about a month and a selection committee to follow.

The matter matters to employees and the city budget because Fleming said claims are the largest cost driver in a self-funded plan and changes to network discounts or benefits can materially affect plan funding and employer contribution levels.

Fleming said the committee should understand the RFP process for a self-funded plan, emphasizing network discounts and facility pricing rather than small differences in administrative fees. “Claims are on the rise, and they've continued to stay at some little bit higher levels,” Fleming said. He told the committee the RFP would go out on Friday, would run for about a month, and then a selection committee and staff would evaluate responses.

Fleming laid out recent financial and utilization details: plan funding for the period was roughly $1.66 million; about $68,000 went to plan administration and roughly $115,000 to reinsurance…