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County hears health-insurance renewal analysis; broker recommends small deductible increase and program changes
Summary
NOVA Benefits broker Spencer Thomas reviewed Keith County’s self-funded health plan, recommending raising the specific deductible from $30,000 to $35,000, extending stop-loss runout protection, and activating international pharmacy sourcing and a lowest-net-cost formulary to reduce future costs.
Spencer Thomas, a broker with NOVA Benefits, reviewed Keith County’s self-funded health plan and proposed changes to the county’s stop-loss and pharmacy arrangements during the board’s meeting.
Thomas told commissioners that “so far this year you’ve run $61,904 under budget,” and said the county’s reserve — about $1.2 million — currently positions it to absorb moderate claim volatility without altering benefits now.
The nut graf: Thomas recommended modest contract changes to lower fixed premium costs while keeping benefits stable. His principal suggestions were (1) raise the county’s specific deductible from $30,000 to $35,000 per member, (2) move the aggregate stop‑loss contract to a 12/18 runout structure (six months of paid-claim runout rather than the current three), and (3) enable international pharmacy sourcing through the county’s Novocash capability and switch to a lowest-net-cost formulary within Prime Therapeutics.
On the deductible, Thomas said data show fewer very large claimants this plan year and that raising the per-member deductible by $5,000 would produce fixed-premium savings of roughly $40,000; he estimated a worst-case additional county liability of about $4,000 in a blowout year. He explained the tradeoff: “the carrier is basically trading claims for premium,” meaning the county’s claims bucket would increase modestly while premium costs fall.
Thomas also recommended strengthening aggregate protection (the group cap) by shifting to a 12/18 contract to capture claims that are submitted several months after the service date. He showed timing data indicating that while most claims are paid within two months, a material share are paid later and therefore can fall outside a shorter runout window.
On pharmacy, Thomas proposed activating international sourcing for certain high-cost specialty medications and moving the county to a lowest-net-cost formulary with the county’s current PBM (Prime Therapeutics). He said international sourcing and formulary changes could produce substantial savings on some drugs and noted the county could waive members’ out-of-pocket costs for those fills as an incentive, while retaining member choice.
Thomas presented alternative scenarios and said the county could choose a more conservative funding level (e.g., 85–90% of expected claims) or opt to keep some contract elements unchanged. He asked the board to consider a decision at a subsequent meeting, noting formal carrier offers would remain open through the end of April.
Commissioners asked clarifying questions about member cost-sharing, plan runout, and program logistics; Thomas said he would email full renewal numbers and a recommended option summary for the board to consider at the next meeting.
Ending: The board did not take a final vote on the renewal at the meeting. Thomas said he would supply written proposals and budget scenarios so the commissioners could act at a future session.
