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Prescott Valley staff outline plan to shift town health coverage to self-funded model
Summary
Town staff presented details on moving the employee health plan from fully insured to self-funded, noting potential long-term cost control and the need for year-one reserves; staff will return with cost modeling and a recommendation, with no vote taken.
Speaker 1 (presenter) told the Prescott Valley Town Council that the primary advantage of shifting to a self-funded health plan is "plan flexibility," giving the town more control over benefits and the ability to deploy programs aimed at attraction, retention and cost management. "The biggest advantage for you is plan flexibility," the presenter said.
The presenter cautioned that self-funding does not remove underlying risk. "When you move from fully insured to self funding, you haven't fundamentally done anything different about your risk," Speaker 1 said, and advised council members not to expect immediate market savings. He said the goal is better data and control so the town can manage costs over a multi-year horizon rather than assume near-term reductions.
Staff outlined two technical protections the town would use if it proceeds: individual and aggregate stop-loss insurance to limit catastrophic exposure, and predictive modeling to smooth funding across…
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