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Council approves Healya agreement to offer spousal incentive HRA after USI warns of 20.9% renewal increase
Summary
Faced with a projected 20.9% increase in the city's self-funded health plan renewal, the council on Oct. 22 approved a master services agreement with Healya to offer a spousal incentive HRA (SIRRA) option designed to reduce high-claim exposure; estimated model savings if 15 employees enroll is about $230,000 annually.
The Hibbing City Council on Oct. 22 authorized the mayor to sign a master services agreement with Healya, clearing the way to offer a spousal incentive health reimbursement arrangement (SIRRA) as an option for employees beginning Jan. 1, 2026. The item followed a presentation by John Sich of USI on the city’s 2026 self-funded plan renewal.
"Our proposed renewal increase is 20.9%," John Sich said, describing claims experience and growth among high-cost claimants as the principal driver of the premium increase. He explained that the SIRRA is designed to give employees with access to an alternate employer-sponsored plan (most commonly through a spouse) a no-cost option to shift coverage while the city reimburses premium differences and out-of-pocket medical and pharmacy costs within defined limits.
Sich and Finance Director Sheena Smaller said the city’s current independent stop-loss deductible is $100,000 per enrolled member; under the proposed arrangement the city’s exposure would be capped at approximately $10,000 per enrolled employee per year, and reimbursements would only be paid if used. Smaller noted there is no cost to the city if no employees enroll; the administrator’s annual administrative fee would be $1,500 per enrolled member. Officials estimated that if 15 employees enrolled in the SIRRA, the net annual savings to the city would be about $230,000.
Council discussed program mechanics, re-enrollment flexibility at future open-enrollment periods, and directed staff to execute the services agreement; the council approved the motion to authorize the mayor to sign the master services agreement on a motion by Councillor Bayless with support from Councillor Hildebrand.
