Santa Fe health plan posts surplus; staff recommends December premium holiday for employees

City staff told the Santa Fe City Council that the city's self-funded medical and prescription plan generated positive experience in the first quarter of fiscal 2026 and can absorb a one-paycheck "premium holiday" for employees in December 2025.

Trey Sarsfield, an actuary with Aon Consulting, told the council that the plan's overall loss ratio for the first quarter was 95.5%, translating to about a $275,000 surplus after accounting for Cigna run-out claims, administrative-fee credits and pharmacy rebates. "We absolutely believe that the plan is in excellent shape to absorb a $218,000 premium holiday," Sarsfield said, referring to the estimated cost of waiving a single employee contribution pay period.

The city's total budget for the plan year is roughly $24.25 million, of which the city pays $18,560,000 and employee contributions account for about $5,680,000. Sarsfield noted that Blue Cross Blue Shield of New Mexico's proposal included a six-month administrative fee credit (about $54,000 per month) and a one-month stop-loss credit; pharmacy rebates were about $155,000 for the first quarter. He added that most run-out claims from Cigna (about $1.385 million) are expected to taper sharply after the initial months following a carrier change.

Councilors asked technical and operational questions about the plan. Councilor Michael Garcia pressed staff on whether a premium holiday could later be clawed back; Sarsfield replied that the city's practice is to treat the payroll holiday as a distribution of surplus and not to seek retroactive recoupment during the plan year, though insufficient experience would inform future rate-setting for FY27. Councilor Lee Garcia and Councilor Cassett thanked staff for clear presentation of the numbers.

Amanda Romero, account executive for Blue Cross Blue Shield of New Mexico, addressed access concerns for members living outside the company's primary network area. Romero said BCBSNM has been "doing one-on-one support for those members" who lack access to certain Presbyterian facilities and that the carrier has been arranging transitions or searching for contracted providers; she also described a partnership with Galileo, a virtual primary- and specialty-care provider, to expand access.

The presentation was informational; councilors praised staff and carriers for the transition work and results. No final governing-body action on the premium holiday was recorded in the meeting minutes; staff presented the quarter results and signaled the plan can support a December 2025 premium holiday if the council and administration proceed with implementation steps.