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Employee health trust update: claims spike drives funding concerns; trust to propose budget amendment
Summary
City staff and benefits consultants told council high medical claims in 2023–24 have reduced the trust’s surplus and that the trust will pursue a market evaluation and likely request a budget amendment in coming weeks to restore reserves.
City staff, the benefits trust board and consultant Gallagher briefed the council on the Employee Health Benefits Trust’s financial status and next steps after larger‑than‑expected medical claims in 2023–24 eroded surplus reserves.
Overview and drivers: Staff said that by 2024 the plan experienced a significant increase in net claims (staff cited roughly $8.0 million in claims and $9.2 million including fees for the 2024 period), and that several large claims (including cancer, gastrointestinal and musculoskeletal disorders) accounted for the bulk of the increase. Staff and the actuarial consultant told council the claims trend is the main driver of a projected funding gap the trust is monitoring.
Proposed planning and market approach: The trust’s consultants and legal adviser recommended a “market check” (sometimes called a pulse check) rather than an immediate RFP run through the city’s procurement process. Analysts described the pulse check as a less‑formal market evaluation focused on administrative fees, stop‑loss pricing and access to…
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