City self-funded health plan posts small surplus as pharmacy costs climb on GLP-1 drugs

The Clearwater Benefits Committee reviewed 2024 claims results and early 2025 data at its April 7 meeting, hearing from Cigna-report summaries presented by Sean, a consultant with The Gary Group. The committee was told the city’s self-funded medical plan finished 2024 with a surplus of about $686,000 on roughly $23.6 million in plan funding, but faces rising pharmacy costs driven largely by new GLP‑1 drugs and specialty medicines.

Why it matters: the city is self‑insured for health benefits, meaning the city pays claims and budgets reserves rather than buying a fully insured product. A sustained jump in pharmacy spending could raise future premiums or draw on reserves the state requires plans to keep.

Sean told the committee that “the city pays the cost of all the expenses ... the city ultimately is on the hook for that,” explaining the self‑funding model and how Cigna administers claims and pharmacy services. He said the plan’s 2024 per‑employee medical claim trend was modest (about a 2.7% increase year‑over‑year), but pharmacy spending rose roughly 20% in 2024 and showed an additional 12.3% increase in early 2025 data, producing an overall plan trend of about 8.5% in the most recent year.

Committe…