Council approves emergency contract to study $23 million city health-plan shortfall

Jacksonville City Council on Aug. 12 unanimously approved an emergency appropriation to hire the Bailey Group to study the city's self-insured employee health plan after officials reported a growing shortfall in the fund.

Council member Bill Salem, who serves as the council's liaison to the group health committee, explained the need on the council floor: the city currently faces an approximately $23 million shortfall between premiums collected and claims paid for the city's self-insured plan, and the plan reserve is about $4 million in the red. Salem said the city has not significantly updated plan design in years and that continued inaction would likely force premium increases for employees.

The contract with the Bailey Group is a one-year engagement that will begin Oct. 1; the consultant will analyze plan structure and recommend changes. Salem said the goal is to produce recommendations that can be considered for the Fiscal Year 2025-26 budget and to avoid raising premiums if plan design improvements can close the gap.

Council member Amaro asked about timing and whether the consultant's work would conclude before the next open enrollment; Salem said the contract is designed to produce findings in 2025 with recommendations that could inform the next budget cycle and potential enrollment changes. The emergency appropriation passed 18-0.

The ordinance amends the budget to appropriate funds for the consultant engagement and directs administrative staff to begin the contract process. The council said it will hold further hearings in the DOGE committee this fall to review consultant findings and possible administrative plan changes.

Council members emphasized that the city must act quickly to address the structural shortfall in the employee health fund, while preserving bargaining and statutory limits on benefit changes and respecting collective-bargaining processes for covered groups.