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Gallagher and staff recommend keeping Florida Blue as TPA, warn of pharmacy trend and reserve needs
Summary
An RFP review led staff and Gallagher consultants to recommend Florida Blue remain the third‑party administrator for Marion County's self‑funded plan; pharmacy costs and high‑cost claimants pushed projections up and staff recommended funding at least the budgeted amount to avoid an estimated $3–8 million reserve shortfall.
Marion County School District officials and Gallagher benefits consultants briefed the school board on June 19 on the self‑funded health plan's RFP results and 2026 projections, recommending continued use of Florida Blue as the plan’s third‑party administrator and flagging pharmacy inflation and rising high‑cost claims.
Stacy Roth and Gallagher’s benefits team reported that three firms responded to the medical RFP and that the committee scored Florida Blue highest on cost, network access, claims‑repricing and utilization management: “Florida Blue scored 92,” the committee reported. The pharmacy RFP was run as a separate procurement; Florida Blue again scored highest and the committee recommended not advancing to interviews because the top scorers were separated by a substantial margin.
Consultants warned of rising trend factors: pharmacy spending rose roughly 35 percent year‑over‑year in recent months, and Gallagher projected medical trend of about 8.7 percent and pharmacy trend of about 11.4 percent for plan budgeting. Gallagher cautioned that, with claims through March, a zero‑increase funding scenario would produce an estimated plan loss near $8 million for calendar 2026, although the district’s current budgeted contribution of about $63.2 million (fiscal 2025–26 budget baseline) would substantially reduce the impact. ‘‘If the district did not increase their funding at all, we would project a loss of roughly $8,000,000,’’ the consultant said.
The presentation showed two members have exceeded the district’s $400,000 stop‑loss deductible already for 2025 and Gallagher is receiving reimbursements; the stop‑loss deductible was increased from $375,000 in 2024 to $400,000 for 2025. The consultants recommended the district proceed with a fall stop‑loss RFP that could include a gene‑therapy rider to address extremely high single‑treatment costs and to limit stop‑loss carrier lasers on large claimants.
Board discussion centered on how much to fund for calendar 2026. Gallagher recommended funding consistent with projections (an 11.8 percent increase from current funding to fully neutralize the fund balance impact) but noted the finance department had already budgeted about $63.2 million for fiscal 2025–26, which is roughly aligned with a minimum 7 percent increase recommendation. Several board members urged staying within the existing budgeted figure while continuing to monitor claims and to preserve plan stability and benefits already offered to employees.
What’s next: Gallagher will return in July with contract recommendations for the medical and pharmacy RFPs and will run a stop‑loss RFP in August; staff will present a stop‑loss recommendation for approval in October, timed with open enrollment. The board asked staff to prioritize fiscal prudence while maintaining employee benefits.
Ending: The self‑funded plan is running higher than in recent years because of pharmacy inflation and several high‑cost claimants. Consultants and staff recommended contract awards to providers that scored best on cost and network continuity while urging the board to retain a conservative reserve posture as the district finalizes 2026 funding.
