Board reviews Aon Hewitt presentation and approves 2016 premiums, hears reserve and rate projections

Aon Hewitt presented detailed recommendations on administrative fees and preliminary 2016 premium levels, along with reserve positions and claims‑trend analyses. The firm reported administrative fees for active members and early retirees at $39.54 and a Medicare‑integrated administrative component at $24.17; staff said a 3% accrual and new value‑based pricing mechanics account for some increases. Aon Hewitt also described a $4,000,000 increase tied to Blue Shield claims payments, which it said increases the required incurred but not reported (IBNR) reserve to about $22,000,000 as of June 30.

The Board discussed rate stabilization policy and surplus carry‑forwards. Aon Hewitt reported a $10,000,000 surplus addition and explained policy requires returning surplus to plan members over a three‑year amortization, with about $8.6 million applied to 2016 rates. On preliminary rates, actuaries recommended a modest increase of roughly 3.5–4% for 2016 versus 2015, noting volatility due to small active cohorts under the UHC city plan and options under consideration for Medicare retiree funding. After presentations and limited discussion, a motion to accept the recommended premiums and admin fee structure was made and carried by voice vote.

Board members and public commenters pressed staff to return with options for early retirees (including banding alternatives tied to federal excise/ACA rules), and Director Dodd and staff agreed to provide further detailed briefings as negotiations with providers or plan‑design options progress. The Board treated these items as part of the rates‑and‑benefits process; no final policy changes to retiree funding structure were adopted at this meeting.