Muskego committee hears options to curb rising city health costs; self‑funding presented as cost-saving — with risks

Muskego City’s Committee of the Whole on Aug. 12 heard a detailed presentation from Cottingham & Butler on options for the city’s employee health insurance, including staying fully insured with Group Health Trust (GHT), moving to a self‑funded arrangement with stop‑loss reinsurance, or joining the state Department of Employee Trust Funds (ETF). The consultants presented cost comparisons, risk trade‑offs and a recommended timeline for next steps.

The presentation matters because the city’s current medical program is a large line item in the budget: Cottingham & Butler reported roughly $2.7 million in total funding today, with the city’s net cost for medical coverage running “just under $2.6 million” after employee contributions and the employer‑funded health reimbursement arrangement (HRA). Consultants said the city faces a proposed renewal of about 9.5% from its carrier for the coming year, which would push net cost toward $2.8 million under current plan design.

Cottingham & Butler’s Sandy Motts, benefits consultant, told the committee the city currently has about 94 enrolled members out of roughly 125 eligible employees (25 single, 13 limited‑family/employee‑plus‑one and 56 family enrollments). She described Muskego’s plan as unusually generous: employer pays roughly 88–89% of premiums (employees pay 12%), the HRA “buy‑down” reduces employee out‑of‑pocket exposure, and the plan’s actuarial value is near 96% — a “platinum”‑level design well above typical public‑sector benchmarks.

Why that matters: richer plan design and heavy employer premium share tend to lift utilization and cost. Motts said Muskego’s participation rate (employees taking the plan) is about 76.4% versus a Wisconsin public‑sector benchmark of 82%, and the city’s dependent ratio (roughly 2.9 dependents per employee on the plan) is above the benchmark (2.64). The…