Douglas County HR recommends 7.1% medical premium increase for 2026; package sent to county board

Douglas County Human Resources staff recommended a 7.1% increase to medical insurance premiums for 2026 and asked the county board to consider a set of renewals and contract terms covering medical, dental, vision and flexible spending accounts. The HR committee discussed stop-loss exposure, dental administrative-fee options and a one-year renewal with WEX for flexible spending account administration and agreed to send the package to the County Board next week for final action.

The recommendation from HR called for a uniform 7.1% increase across all medical tiers. HR said the increase would be split between employees and the county, and that staff did not plan to subsidize any portion of the annual increase from the medical reserve this year. Karen Butch, HR, told the committee the plan had been running “a little bit under claims for this year” but that recent large claims and a higher stop-loss preliminary renewal—reported at about 39%—supported the increase.

Why it matters: Douglas County’s medical plan is the largest single benefit expense and HR told the committee the county’s medical spend is on the order of $30,000,000 annually. The proposed premium increase affects active employees and retirees, and HR noted the retiree plan is grandfathered and must maintain existing percentage splits.

Key details discussed - Medical: HR recommended a 7.1% increase “across the board on all tiers,” and said staff and the county would each absorb a 7.1% share rather than the county subsidizing employee increases this year. Staff noted prior-year underwriting variance—last year the plan ran roughly 12–13% under projections, which allowed a 0% increase then. - Premium amounts: HR presented total monthly premium examples (total premium, employer + employee) of roughly $1,200 for employee-only coverage, about $2,200 for employee-plus-spouse or employee-plus-children, and roughly $3,000 for family coverage. HR also listed employee monthly contributions after the split as about $77.69 for single coverage, $305.41 for employee-plus-spouse or employee-plus-children, and $411.65 for family coverage. - High-cost claim exposure and stop loss: Staff said the plan experiences a number of large claims “almost every year,” and that stop-loss renewals are a driver of higher costs. The stop-loss preliminary renewal figure cited in the presentation was 39%. - HSA/high-deductible plan: About 200 employees—roughly 10% of covered lives—are enrolled in the high-deductible health plan with HSA, and HR said members expressed a strong preference to retain that option. - Dental: HR reported the dental administrative fee increase would be 12.3% (roughly $12,000). Holmes Murphy (the county’s new broker, contracted Aug. 1) presented renegotiated options to reduce that increase to 9% for two years or 11% for three years; HR recommended the three-year option to lock in stability while acknowledging administrative fees are likely to continue upward. - Vision: Holmes Murphy and HR negotiated a four-year flat rate for vision with a higher frame allowance, increasing the frame benefit from $130 to $150; employees currently pay the full cost of the vision plan. - Flexible Spending Account (FSA)/WEX: HR recommended a one-year renewal with WEX; the proposed administrative fee rose to $3.50 (with commuter administration at $1.63 per month). HR said the increase translates to roughly $3,200–$3,300 in additional annual administrative costs and that staff plan a request for proposals (RFP) in 2027 to seek lower fees. - Medical reserve: HR estimated the county’s medical reserve impact from small administrative adjustments at about $11,000 and said they did not plan to absorb the 2026 increase from reserves.

Board requests and next steps Committee members asked for more frequent reporting on claims and prescription drug cost drivers. Several commissioners requested quarterly or HR committee briefings so the board can see year-round claims trends instead of receiving renewal information only at the renewal moment. Holmes Murphy staff said renewal numbers were received late (Sept. 30) and that the new broker had worked quickly to produce the proposals.

HR said it would place the recommended package on the County Board agenda for next week with a recommendation to approve the renewals and contract terms. No formal board action was taken at this meeting; the committee’s discussion was a recommendation and referral to the County Board.