Chippewa County reviews self-funded health plan after 2024 losses; HR outlines reforms and vendor issues

Tony Hoefelder, Chippewa County human resources director, told the County Board the self-funded health plan showed higher claims in 2024 driven by more high-cost claimants and that the county moved stop-loss coverage from a captive arrangement to a traditional carrier, QBE, for 2025.

Hoefelder said the county’s fund balance for the self-funded plan was bolstered at year‑end by a $2.3 million transfer from general funds and that the plan recorded a sizable variance in 2024 claims. “We do have some sick members on our plan. We have cancers. We have, some children who are really struggling with certain prescriptions. We do have several high cost members right now,” he said.

Key points Hoefelder and staff presented: - Fund status: staff reported that without the administrator’s end-of-year transfers the health-insurance fund balance would have been lower; the presentation shows a multi-year evolution from a starting fund balance of roughly $1.4 million in 2021 to the current position after transfers. - Stop-loss and plan design: the county changed stop-loss providers to QBE (a traditional stop-loss carrier) and implemented 2025 plan-design changes that raised deductibles and out-of-pocket maximums, reduced HRA amounts, and increased some copays; employees absorbed about 10% of the 2024 premium-equivalent increase through plan design changes. - High-cost claimants: the broker’s data showed high-cost claimants rose from 9 members over $775,000 in 2023 to 17 in 2024; this increase drove much of the 2024 expense variance. - Vendor programs and outcomes: the county reported a roughly $1.3 million return on investment attributed to the Reform Medicine primary-care partnership, which county staff said generated large lab- and vaccine savings compared with standard market charges. The county also reported estimated savings of about $32,802 from a doctors-of-physical-therapy (Doctors of PT) partnership and said the first 10 PT visits are offered at reduced or no charge under that program. - Vendor performance issues: Hoefelder described administrative and customer-service problems with Aletheus, the county’s care-navigation partner, including staffing turnover, slow callbacks, and billing issues that produced unexpected out-of-pocket costs for some employees.

Board members asked whether moving back to a fully insured plan would reduce risk; Hoefelder said a smaller, engaged plan like Chippewa’s would likely pay more under a fully insured arrangement and that the county’s broker did not recommend a return to a fully insured model at current enrollment and cost patterns. “We’re gonna pay more money,” he said in the course of the discussion.

Looking ahead, HR and the broker are preparing options for 2026 that include shifting some premium costs to employees, spousal surcharges, dependent-eligibility audits, and other strategies to control costs; no formal policy change was adopted at the meeting.