Benefits committee recommends PEHP high-deductible plan with HSA and to take proposal to City Council

A city benefits review committee recommended switching the municipality's employee health insurance to a PEHP high-deductible plan paired with an employer-funded Health Savings Account, and agreed to send the proposal to the City Council for final approval.

The committee's discussion, led by a presentation from Aaron (committee presenter), concluded that PEHP's local government risk-pool plans would avoid individual health questionnaires and age-banded individual pricing used by some commercial carriers. "PEHP doesn't have any individual rating. It's all just the local government risk pool," Aaron said while describing the vendor comparisons.

Why it matters: committee members said the PEHP option would reduce the city's premium costs, limit exposure to individual underwriting and age-band pricing, and pair naturally with an HSA to offset higher deductibles for employees. Committee members also discussed network trade-offs, potential first-year exposure for employees with large medical needs, and legal limits on discussing individual employee health during a public meeting.

Key details from the presentation

- Vendors reviewed: SelectHealth, UnitedHealthcare, Aetna and PEHP. Aaron told the committee that UnitedHealthcare and Aetna proposals relied on health questionnaires that could raise rates or exclude high-risk family members, whereas PEHP uses a government risk pool and does not individually underwrite employees.

- Current plan: Aaron summarized that the city's current SelectHealth plan is a traditional plan with an approximately $750 individual deductible, roughly $2,250 family deductible, and an out-of-pocket maximum of about $8,500 individual and $17,000 family.

- PEHP proposal: The committee compared two PEHP high-deductible options: one with an individual deductible around $1,650 and family $3,300, and another with a roughly $3,000 deductible. Aaron described option 5 (the higher HSA funding option) as the committee preference.

- Employer HSA funding: To reduce employee out-of-pocket exposure, the committee agreed to recommend funding $100 per biweekly pay period into employees' HSAs (26 pay periods), totaling $2,600 per year per enrolled employee. Aaron said that contribution would significantly reduce the employee's effective out-of-pocket exposure under the high-deductible scenario while preserving the long-term tax-advantaged savings benefit of HSAs.

- Network choice and buy-up: The PEHP Summit (MountainStar) network was proposed as the base network. Employees who want access to the Intermountain (Advantage) network could buy up that coverage for an estimated additional cost of about $3,000 per year; Aaron noted employees would retain the $2,600 HSA contribution even if they buy up the network, making the net additional annual cost closer to $400 for some employees, depending on family composition and use.

Concerns and trade-offs

Committee members expressed caution about first-year and catastrophic scenarios. One member noted that while higher deductibles lower premiums, a year with major medical care (for example, cancer or multiple surgeries) could expose employees to large out-of-pocket costs before HSA funds are accrued. Aaron and other members responded that the PEHP options would lower the plan's maximum out-of-pocket compared with the current SelectHealth design (e.g., reducing a family's potential maximum exposure from about $17,000 to a lower cap under the PEHP options), and that employer HSA funding mitigates near-term risk for employees.

Open meetings and privacy

Before substantive discussion, the committee debated whether to go into a closed (executive) session because the topic touches on individual employee health and family medical information. Jody and others noted the committee must follow the Open Public Meetings Act and that closed sessions require specific agenda notice or a vote according to state law. The committee proceeded by having employees with potential conflicts temporarily leave the live portion of the call while the public-record discussion continued; the committee ultimately voted to hold a brief closed session earlier in the meeting.

Formal committee actions

- The committee voted to go into a closed session to discuss employee health and conflict-of-interest concerns; a motion was made and seconded and approved by voice vote.

- The committee moved and approved a recommendation that Aaron present the committee's PEHP/HSA proposal to the City Council at the next meeting. Aaron agreed to present the recommendation to the City Council on the following Tuesday at 6 p.m.

- The meeting was adjourned by motion after confirming the committee's readiness to forward the proposal.

What happens next

The committee will send the PEHP/HSA recommendation, including the comparison spreadsheet Aaron presented, to the City Council for consideration. Aaron volunteered to present the materials at the City Council meeting scheduled for Tuesday at 6 p.m.; the committee agreed to attend that meeting to support the recommendation.

The committee noted several implementation points that will need clarification during council review: final plan design selection (which deductible and out-of-pocket structure), confirmation of PEHP's participating facilities and networks for employees in different geographic locations (including Saint George and out-of-state travel), exact premium and buy-up costs per employee, and final language about employee HSA funding in plan documents.