Cheshire seeks 6.9% increase to medical-benefits fund amid stop-loss volatility
Summary
District officials proposed a 6.9% increase to the medical-benefits account to cover projected claims, stop-loss premium increases and HSA contributions, and discussed the trade-offs of joining the state partnership plan.
Cheshire's proposed budget includes a recommended 6.9% increase to the medical-benefits fund, where district staff forecast higher claims, stop-loss premium increases and other health-plan costs.
COO Emily Taylor told the board the district is budgeting about $16.3 million in claims next year and building the $17 million medical-benefit recommendation by adding stop-loss premiums, HSA contributions and administrative fees. On stop loss she explained: "Stop loss is when we're getting reimbursed for claims over $175,000." Taylor reported $837,000 in stop-loss reimbursements during the year but noted a $1.6 million premium and a 50.6% loss ratio in the year discussed, adding that such ratios are volatile year to year.
Board members questioned whether the district should join the state partnership plan to reduce volatility. Taylor said the state plan is more expensive in per-employee premiums in many cases and that joining would eliminate certain HSA contributions (because a PPO design would replace the HDHP for some participants), but acknowledged the town and district continue to evaluate the state plan's changing risk profile.
Taylor also noted a marked rise in HDHP/HSA participation (from roughly 5% to 83% over the last decade) and said the district is sensitive to union contract provisions that determine final benefit design and employer contributions.
District staff agreed to provide additional actuarial or reserve-status detail to board members after the meeting.
