Health Service Board approves using full $1.66 million stabilization reserve to lower 2019 City Plan premiums

The Health Service System Board approved on June 14 a one‑time suspension of its self‑funded rate stabilization policy and the application of the full City Plan stabilization balance — $1,661,000 as of 12/31/2017 — to city plan and city plan choice‑unavailable rate cards for the 2019 plan year. The motion passed 4–1.

Aon, the board’s actuarial partner, presented two scenarios: Scenario 1 applied one‑third of the stabilization balance in the rates; Scenario 2 used the entire balance for 2019. ‘‘In total, this should save a little over $1,000,000 in total cost savings,’’ Aon’s Mike Clark told the board while describing the aggregate fiscal effect. The full application would reduce monthly contributions for some early‑retiree tiers by roughly $16–$58 per month compared with the one‑third approach.

Board members pressed staff and Aon on distributional effects. Commissioner Breslin argued the measures mainly benefit employers for many tiers and questioned the effect on active employees who face substantially higher deductions. Commissioner Sass acknowledged the limits of the stabilization funds but said she could support the full‑use proposal: ‘‘I can support scenario 2 myself,’’ she said after reviewing utilization and forecasting data, while cautioning the relief may be modest for many active members.

President Scott noted the decision is a near‑term step and emphasized continued work to pursue longer‑term stability for the City Plan in future cycles. The board directed staff to continue developing strategies for 2020 and beyond.

Vote: President Scott — yes; Vice President Lim — yes; Commissioner Breslin — no; Commissioner Frigno — yes; Commissioner Sass — yes. Outcome: approved 4–1.

The board will incorporate the adopted rate cards into open‑enrollment materials for retirees and active employees and continue follow‑up actuarial monitoring through the fiscal year.