Health Service Board uses full $3 million stabilization reserve to limit 2018 UHC city‑plan increases

The Health Service Board voted to apply the entire remaining $3,000,000 stabilization reserve to the UnitedHealthcare (UHC) city plan to reduce 2018 premium contributions, a measure the board adopted 5–2 after two rounds of motions and public comment.

Aon Hewitt actuary Anil Coacher presented three options to address sharp projected contribution increases for the city’s self‑insured PPO pool and recommended Option 2, which directs the full remaining stabilization balance to the plan. Coacher said Option 2 produces the smallest increases for most early retirees — an $18.86 monthly rise for single early retirees under the recommended plan — whereas the status quo and a smaller draw on reserves would have led to substantially higher increases.

President Scott, supporting the motion, framed the decision as a choice to preserve coverage for members who have few alternatives. "We can't let a short‑term hit drive people out of this plan," Scott said. Actuarial detail presented to the board showed the plan has about 554 early‑retiree singles under UHC, 156 two‑person early‑retiree counts and 22 family enrollees; the actuary emphasized distributional differences across those groups when comparing options.

Commissioner Breslin and one other member dissented, warning that spending the stabilization reserve now could leave little cushion for 2019 and beyond. Commissioner Breslin argued the program’s MOU contribution formula — which ties employer pickup to the second‑highest cost plan — creates a structural problem that needs a longer‑term solution rather than a one‑time drawdown. "This pool cannot sustain itself with the present MOU requirements," Coacher testified, recommending the board explore broader pooling or high‑deductible alternatives for future years.

Claire Zavonsky, speaking for retiree advocacy group RECCSF, urged the board to choose Option 2, saying it would keep members in the plan and provide the greatest immediate benefit. Following discussion and a failed motion to use 50% of the contingency (which lost on a 3–4 roll call), the board approved the full allocation on a 5–2 roll call: yes votes from President Scott, Vice President Lim, Supervisor Farrell, Commissioner Follinsbee and Commissioner Sass; no votes from Commissioner Breslin and one other member.

Next steps: staff and the actuary will incorporate the adopted Option 2 figures into final rate cards and monitor 2018 claims experience; Coacher recommended exploring merging the PPO into a larger pool for 2019 rating and considering plan design alternatives to enhance long‑term sustainability.