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Board approves 9% average increase for UnitedHealthcare city plan after stabilization write-up explained
Summary
The Health Service Board approved an average 9% increase across UnitedHealthcare’s city plan and the ‘city plan choice not available’ product, driven by 2019 experience trended to 2021 plus a rate‑stabilization amortization that increased buy‑up; commissioners were briefed on how employer contributions for early retirees are calculated.
Aon actuary Mike Clark presented the UnitedHealthcare city plan (self‑funded) renewal and said the aggregate increase for the combination of the city plan and the city‑plan‑choice‑not‑available product is 9% after applying a rate‑stabilization amortization. Clark said planned claim forecasts used 2019 claims trended to 2021 (5.5% medical trend, 6% pharmacy trend) and that a stabilization deficit amortization contributes roughly 1.5 percentage points to the overall increase.
Clark reviewed the city‑charter formula used for early‑retiree employer contributions, which combines a 10‑county benchmark amount, a plan‑specific actuarial difference and a retiree proportional contribution; because the 10‑county amount rose only modestly, some retiree tier contributions show larger percentage increases even when dollar increases are smaller.
UnitedHealthcare’s Heather Chianella described relief the carrier is providing—returning 10% of May ASO fees to the SFHSS trust—and noted ongoing disease‑management and network initiatives. Commissioners asked about family‑rate adjustments, dental offerings and how stabilization policy is applied; Clark explained that family‑ratio alignment for early retirees is in its final year of a previously approved three‑year adjustment and that the stabilization policy spreads deficits or surpluses over multi‑year amortizations.
After a brief public‑comment pause with callers urging reconsideration due to pandemic hardship, Commissioner Randy Scott moved to accept staff recommendations; Commissioner Steven Follinsby seconded and the board approved the UHC recommendation unanimously. Staff said the carrier’s ASO fee return will flow through the SFHSS trust and that staff would report more details on the amount and disposition at the next meeting.
