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County consultants warn employee health fund may run short; commissioners schedule follow‑up workshop
Summary
Consultants told the court June 18 the county’s self‑funded medical plan is projected to run a roughly $2.5 million shortfall by 9/30/24 absent changes; McGriff presented options including an aggressive single‑year funding increase and phased approaches. Commissioners asked for a focused workshop July 8 to consider plan design and rate options.
Nueces County’s employee health insurance fund is projected to post a deficit by the end of the current fiscal year unless the county increases funding, the court heard June 18.
John Bassam of McGriff Insurance Services, the county’s employee benefits consultant, reviewed vendor renewals and a financial outlook for the self‑funded medical and pharmacy plan. McGriff’s analysis projects an approximate $2.48 million shortfall in the plan at 9/30/24 under current funding rates. The consulting team presented a series of funding options for the court to consider:
- An “aggressive” option that targets plan breakeven by 9/30/25 would require a total premium increase of roughly 24.12% (an employer contribution increase of about 27.08% and an employee increase of about 7.5%). McGriff projected that would close the gap in one year, assuming no unusually large claims.
- A phased option would spread increases over multiple years to reduce the near‑term budget impact on the county while returning the plan to stability over a longer period.
McGriff also noted pharmacy rebates and stop‑loss premiums as material budget inputs and recommended issuing requests for proposal for benefit vendors before the 2025 plan year to test the market and potentially reduce administrative costs.
Commissioners raised questions about the county’s “grandfathered” plan status and the limits that status places on plan design options; court members requested more detail on the trade‑offs between staying in the current plan structure and changing to a non‑grandfathered plan. Because the decisions affect open enrollment and vendor scheduling, the court agreed to hold a focused follow‑up workshop on July 8 to review detailed plan scenarios and vendor proposals before finalizing rates or design choices.
McGriff earlier reviewed renewal proposals for medical administration, pharmacy, dental and other ancillary lines and reported mostly stable fees but rising medical and pharmacy cost trends (McGriff used a working estimate of roughly 6.5% medical trend and 10.5% pharmacy trend for projections). County staff and McGriff said they will provide commissioners with further scenario detail ahead of the July 8 workshop.
Provenance: McGriff presentation and subsequent court discussion, June 18, 2024.
