Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Public Employee Benefits topic
No spam. Unsubscribe anytime.
Actuary recommends 13% health-premium increase to rebuild Lorain County reserves
Summary
An independent actuary presented a 2026 forecast for the county's self-funded health plan, recommending a 13% premium increase effective Jan. 1, 2026, to restore reserves to a 30% target over five years; the board received the presentation and did not take immediate action.
Steve Parsons, the county's contracted healthcare actuary, presented the 2026 forecast Sept. 23 and recommended the commissioners consider a 13% premium increase effective Jan. 1, 2026, to begin rebuilding the health fund's reserves.
Parsons said the county's projected total program cost for 2026 is approximately $53.385 million; current premiums (with the same headcount) would cover about $47.246 million, making a 10.1% increase the actuarial breakeven. The 13% recommendation is designed to both cover projected claim trends and begin replenishing reserves over a five-year period under the county's funding policy.
Key assumptions Parsons identified include medical inflation at about 6.25%, prescription drug trend at about 9% (after rebates), a specific stop-loss attachment point of $500,000 with anticipated reinsurance fee increases, and fixed administrative fees of roughly $3.3 million. Parsons said prescription drug costs are a significant driver (gross prescription spend discussed at roughly $11 million) and that manufacturer rebates from the PBM are included in the net projections.
Under the county's reserve policy (adopted in 2024), the target reserve is 30% of projected annual costs, with a 5% tolerance band. Parsons reported projected reserves would be about $2.8 million below target by the end of the year if no action is taken, and roughly $7.7 million below target in five years under a no-change scenario.
Commissioners and staff discussed plan design levers (prescription strategies, working-spouse rules, eligibility and plan design) that could reduce long-term trend. Board members asked for time to consult unions and staff; county administrators asked that the board consider final action before mid-October to enable open enrollment planning. No formal vote was taken at the Sept. 23 meeting; staff were directed to return with corrected materials and premium figures and to schedule a vote prior to the county's open enrollment deadline.
