Brown Deer board authorizes staff to pursue self-funded health plan for 2026

The Village of Brown Deer Board of Trustees voted unanimously on June 2 to authorize village staff to work with benefits broker Brown and Brown to initiate a self-funded health insurance model for plan year 2026.

Brown and Brown lead consultant Alex Lewinsky and account representative Andrew Williamson gave a roughly 40-minute presentation explaining how self-funding would shift claims risk from a carrier to the village while relying on stop‑loss reinsurance to cap catastrophic exposure. "When you're self funded, liability remains with the village," Lewinsky said, explaining that the village would still purchase stop‑loss coverage to limit large-dollar claims.

The presentation outlined two common approaches: traditional self‑funding, which exposes the employer to month‑to‑month claim volatility but returns underwriting gains to the employer over time, and level‑funded plans, which smooth monthly payments. Brown and Brown estimated that, under conservative assumptions, a self‑funded approach could have produced roughly $300,000 in savings over recent years but cautioned savings are not guaranteed. "This is not a short‑term play," Williamson said. "Over a 10‑year span ... you will win being self funded over time, but there will be hot moments."

Trustees asked detailed operational questions about staffing, privacy and reserves. Derek (village staff) and Tyler (village staff) confirmed the village would not create a new full‑time position to manage the plan; administration would be handled by existing staff working with a third‑party administrator (TPA) and Brown and Brown. On confidentiality, Brown and Brown said the village could restrict identifying claim details to only a designated privacy officer or opt to receive aggregated reports only.

Brown and Brown presented several clarifying figures during the discussion: a stop‑loss individual specific attachment example of $50,000; an illustrative administrative cost estimate (discussed at roughly 30–50 percent of certain line items, with the broker using 40 percent for conservative modeling); and a historical premium vs. claims illustration showing premiums exceeded claims by about $1.5 million over July 2019–May 2024. The broker cautioned the modeling used incomplete carrier data and called the numbers illustrative, not predictive.

Several trustees expressed concern about risk to the village and employees. Trustee Johnson asked whether savings in good years would be earmarked; staff and the broker said the village could place reserves in a designated fund (e.g., a special revenue or benefit reserve) to smooth future volatility. Trustee Booker and Trustee Holt asked about age demographics and potential impacts on employees; the broker said younger employee demographics help but do not eliminate catastrophic risk.

After discussion, Trustee Woods moved and Trustee Jasmine seconded a motion "to authorize staff to work with Brown and Brown to initiate a self‑funding model for health insurance for the year 2026." The board voted in favor and the motion carried unanimously.

The board also directed staff to continue coordination work with Brown and Brown and to include self‑funding assumptions in the 2026 budget process and to provide periodic updates to the Finance and Personnel Committee during the first year of implementation.

The presentation identified next steps that will be required before a final plan selection: selecting a TPA and stop‑loss carrier, negotiating stop‑loss terms, determining the plan's network and pharmacy benefit manager, and setting required reserve levels. Brown and Brown noted additional options—such as joining a captive reinsurance pool—would require capital and longer‑term commitments but can provide more favorable stop‑loss pricing for similarly sized employers.

Staff indicated the village will present implementation details and periodic check‑ins to the Finance and Personnel Committee and to the full board during the 2026 budget process.

For now the board’s action allows staff to begin contract and procurement work with Brown and Brown and potential TPAs and reinsurers while continuing due diligence and further data analysis.