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Personnel office cites rising health claims as driver of FY26 health insurance fund increase
Summary
The county Office of Personnel told the council FY26 increases in the health insurance fund are driven by claims rising about 8–8.5% and general medical cost inflation; the office also reported nearly full staffing, recent contract renewals, and ongoing HRIS upgrades including eTime rollout.
Anne Arundel County’s Office of Personnel presented its FY26 budget to the County Council, saying most of the department’s requested increase reflects personal services and expected higher claims in the county health insurance fund.
Personnel Officer Ann Badowski told the council the department’s FY26 request totals roughly $9.8 million, with about three‑quarters going to personnel costs. She said the office is nearly fully staffed with three vacancies, two actively recruiting. Badowski highlighted multi‑year improvements: new contracts for dental, vision and life insurance started Jan. 1, 2025; an RFP is underway for medical and pharmacy benefits to be implemented Jan. 1, 2026; and the county continues to expand its ADP HRIS platform.
Budget staff Steven Thru noted the general fund portion of the personnel budget rises by about $366,000 (just under 4%), while the health insurance fund increases by roughly $6.0 million. Thru and Badowski attributed the larger health insurance fund increase to claims — personal‑services line shows $122 million driven by claims — with claims expected to go up roughly 8–8.5% next year after a roughly 5.5% increase this year. Badowski and budget staff said that rise likely reflects both cost inflation for medical services and more utilization by covered members.
Badowski also described operational projects: continued enhancements to the ADP HRIS including an eTime/time‑and‑leave rollout, benefits platform improvements that supported open enrollment, and leadership development programs that have graduated four cohorts of about 100 employees. She said negotiations produced seven ratified agreements for FY26, with several multi‑year deals negotiated recently.
Council members pressed whether the claims increase stemmed from higher unit costs or more people using care; Badowski said it was ‘‘probably a combination of both’’ and described rising labor costs for providers as a factor. The personnel office estimated about a 7.5% five‑year average of increases and characterized the FY26 projection as within that trend.
The presentation was informational; no formal council appropriation vote occurred during the department briefing.
