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City told IIIA trust saved about $4.2M and recommends 10% renewal budgeting
Summary
Megan Lockwood presented the IIIA annual report to Star council, reporting roughly $42.5 million in budget, ~124 agencies served, estimated program savings of $4.2 million, stop-loss impacts and a recommendation that agencies budget about 10% for renewals.
Megan Lockwood, representing IIIA, presented the trust's 2024–25 annual report to the Star City Council on Nov. 18 and urged continued participation in wellness and pharmacy programs that the trust credits with cost savings.
Lockwood said IIIA covers roughly 124 agencies across the state with more than 2,500 employees and about 6,400 members, and reported an annual budget "a little over almost 42 and a half million." She told the council the trust estimated program savings of about "$4,200,000" for the year, driven by pharmacy program changes, pharmacy rebates and care-management programs.
She said the trust moved to Smith Rx as its PBM in October 2024 and that change, combined with programs such as international sourcing and mail order, produced an estimated 5% decrease in per-employee-per-month costs for the plan year. Lockwood also described stop-loss (catastrophic insurance) impacts: as of the report she said four members had met the stop-loss deductible and the incurred-but-not-paid (IBNP) reserve stood at $2,900,000.
Lockwood explained the trust's underwriting process, saying the trust rated 42 agencies during the cycle and declined 10 applicants after medical underwriting determined they were too high-risk to accept into the pooled plan at that time. She recommended that agencies budget roughly 10% for renewals as a conservative planning assumption.
Council members asked whether "declined agencies" meant the agency declined the trust or IIIA declined the agency; Lockwood confirmed the trust declines some applications based on medical underwriting. There were additional questions about benefit options such as flexible spending accounts and whether those are offered as part of the trust; Lockwood said FSAs/HSAs are usually offered by individual agencies rather than the pooled trust and that IIIA had not historically offered them as a trust-wide benefit.
Lockwood closed by encouraging continued participation in wellness screenings, noting the trust screened roughly 1,230 members last year (about 37% of eligible members) and identified several high-claim diagnoses that wellness programs target for early detection and management.
