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SFHSS unanimously approves multiple rate actions, declines external stop‑loss coverage
Summary
The San Francisco Health Service System Board unanimously approved several 2021 rate and plan actions — including a decision not to buy external stop‑loss reinsurance, a $729.19 monthly 10‑county employer contribution, VSP and UHC rate actions, a Blue Shield premium buy‑down, and the 2020 audit plan.
The San Francisco Health Service System (SFHSS) Board on March 12 approved a set of rate and governance actions affecting city employee and retiree health plans and auditing priorities.
In a series of unanimous voice votes, the board accepted Aon’s recommendation not to purchase external stop‑loss reinsurance for SFHSS self‑funded and flex‑funded plans for the 2021 plan year, citing existing contingency reserves, Blue Shield large‑claim pooling and plan design limits for dental coverage. Mike Clark of Aon presented the analysis and recommended relying on existing stabilization and contingency policies rather than buying an additional insurance layer.
The board also approved the 10‑county survey result used to set employer contributions for plan year 2021: an average monthly contribution of $729.19, a 3.3% increase from $705.92 in 2020. That figure will be used in employer contribution determinations as required by the city charter.
Board members next approved the Vision Service Plan (VSP) renewal for calendar year 2021, which keeps the basic and computer‑vision benefit rates unchanged and applies a 4.1% increase to the Premier vision plan to satisfy an overall 2% premium policy constraint. Commissioners asked Aon to obtain follow‑up data from VSP on the share of frames dispensed through Costco versus other network providers.
UnitedHealthcare’s administrative services fee for the City Plan (ASO) also received board approval. Aon recommended a 2% increase to the base ASO fee and presented a total per‑employee‑per‑month (PEPM) expense estimate that incorporates shared‑savings, facility R&C, and value‑based contracting programs; the board voted to accept those figures.
For Blue Shield HMO plans (Access Plus and Trio), the board approved a rate stabilization action that applies one‑third of the calculated stabilization surplus — $2,562,000 — as a buy‑down to 2021 premiums, a move that Aon estimated would represent about a 0.8% premium reduction when rates are presented in May.
Finally, the board approved SFHSS’s audit policy and the 2020 audit plan, which includes internal audits, HIPAA privacy and security reviews, fraud/waste/abuse work with major carriers and an audit of high‑cost claims.
All votes were taken by voice and recorded as unanimous. No motions failed; no roll‑call vote tallies with member‑by‑member votes were recorded in the public transcript. The approved actions will be incorporated into the SFHSS rate‑setting and administrative processes for the 2021 plan year.
What happens next: staff and Aon will incorporate the board’s decisions into the May and June rate presentations and the 2021 plan documents; Aon and carriers were asked to provide follow‑up data on specific vendor questions (for example, VSP’s provider mix and Costco dispensing share).
