Indianola council hears health-insurance renewal options, keeps stop‑loss at $100,000

A Holmes Murphy consultant presented the city of Indianola’s proposed 2025 employee benefits renewals and budget options at the March meeting, outlining medical and pharmacy trends, stop‑loss choices, pharmacy rebate options and recommended vendor changes.

Holmes Murphy said the plan—urrently averages $1,009.85 in claims and administrative cost per employee per month while the city—udget is set at $1,071.03 PEPM. The consultant noted pharmacy rebates year to date total about $54.45 per employee per month and historically average near $63.35 PEPM; the firm also reported no members had breached the plan—arrier nnual specific stop‑loss threshold so far this plan year.

Why it matters: the city is self‑funded and holds a health‑insurance reserve of roughly $3 million. Renewal choices — including stop‑loss levels and whether to accept a guaranteed pharmacy rebate credit — affect the city—udget, the reserve drawdown and the risk of a larger future premium increase.

Holmes Murphy outlined the renewal numbers submitted by Wellmark. Fixed administrative fees proposed by Wellmark were shown rising about 11.5% (for example, an admin fee moving from $50.75 to $53 per employee per month), and stop‑loss costs projected to increase from about $210.67 to $242.48 PEPM. The consultant explained stop‑loss underwriting and why carrier projections can differ from the city—xperience: "Walmart [the carrier underwriter] does not view a 100‑person group the same as a large book of business," the presenter said, noting the carrier gives the group partial credibility because of size.

On plan design, the consultant said the Internal Revenue Service has increased 2025 minimums for qualified high‑deductible health plans, requiring the single deductible/out‑of‑pocket minimum to rise (the presenter cited an increase from $3,200 to $3,300 for single coverage). The consultant proposed increasing the family deductible modestly to keep an industry standard gap between single and family levels.

Several specific program and budget recommendations were discussed and accepted by the council/staff present: adopting the Prudent Rx specialty‑drug program that routes certain specialty fills through CVS nd uses manufacturer assistance to reduce disruption; testing Wellmark—PA—oupon/rebate credit (a guaranteed $100 per employee per month credit) for one year instead of receiving actual manufacturer rebates; keeping the city—mployee contribution percentage flat; and keeping the specific stop‑loss deductible at $100,000.

On pharmacy rebates the presenter explained: "manufacturers have rebates associated with prescription drugs... Wellmark actually passes a percentage of the rebates they receive from manufacturers of those drugs directly back to the city." The group discussed tradeoffs: the guaranteed $100 PEPM credit would be substantially higher than current actual rebates but could be outpaced if specialty utilization spikes.

Budget modeling shown by Holmes Murphy projected that, under current assumptions and the city ctuarial tool, the plan could finish the year under the current budget by roughly $77,000 in a reforecast scenario; a projection scenario that moved budget toward the carrier ctuary showed a higher required increase, but the consultant emphasized the city historically runs more favorably than the carrier—ook.

Council and staff also discussed use of the reserve: premium holidays have been used in prior years, and the city currently pulls medical premiums from the reserve fund. Presenters said common reserve planning is to hold roughly three months of claims to cover a runout if the plan ended. The group discussed options to use excess reserve funds for premium holidays and other employee wellness expenditures and agreed to continue the practice of voting on premium holidays as annual/periodic decisions.

Other vendor recommendations: renew dental with Mutual at the quoted 3% increase (about $118,000 annually), and move the vision plan from Avisis to Delta Vision (a quoted option the presenter said would reduce costs by about 9% and include plan enhancements such as a higher frame allowance). The HSA custodian remains TrueBank while staff will investigate whether TrueBank can offer additional investment options similar to retirement custodians.

Decisions recorded in the meeting included adopting Prudent Rx, trying the $100 PEPM pharmacy rebate credit for a year, maintaining the $100,000 specific stop‑loss deductible, keeping employee contribution rates flat, retaining TrueBank as the HSA vendor while staff investigates investment options, and pursuing the recommended dental and vision renewals. The council also discussed allowing up to four premium holidays in a year as a flexible option and agreed staff will bring back formal language and schedule follow‑up discussions in April.

The presentation materials and the consultant—omments emphasized that several enrollment or vendor options can be revisited at next year nnual renewal and that any decision about guaranteed rebate credits or stop‑loss changes can be reversed at the following renewal.

Ending: Staff were asked to research specific reserve‑eligible uses (including whether dental and vision premiums may be paid from the reserve) and to return to council with clarified figures and contract language ahead of finalizing renewals for open enrollment.