Board hears Kaiser/Aon presentation on funding options, directs actuary to model three alternatives

Aon Hewitt and Kaiser Permanente spent most of the Health Service Board’s January session outlining three alternative funding structures for Kaiser coverage and the trade-offs of each, prompting commissioners to ask for a full actuarial comparison before pricing decisions later this year.

The presentation, led by Aon representatives and Kaiser account executives, framed the options as: (1) risk-sharing, where the city pays a Kaiser-set premium and reconciles actual experience 180 days after the plan year; (2) a FlexFund or premium-equivalent approach that creates a premium-equivalent and returns funds to the trust in near real time; and (3) full self-funding, which removes insurer profit but requires third‑party administration and stop‑loss coverage.

"We're at a fully insured structure and what we want to propose to the Board is consideration of whether or not to take risk as a way to reduce margins, increase cash flow and increase the net…