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Mercer projects $128.3M in 2026 health‑plan costs; Mercer and board debate reserve shortfall and employee contribution scenarios
Summary
Mercer told the Virginia Beach School Board that the 2026 health‑plan gross cost is projected at $128.3 million and the health fund is expected to end 2026 at about $11.8 million, roughly $9.96 million below the industry target reserve. Mercer outlined three 2027 scenarios that would shift more cost to employers if employee contributions remain unchanged.
David Keogh, a principal with Mercer, told the Virginia Beach School Board that Mercer’s updated projection using claims through Dec. 31, 2025, puts the 2026 gross cost for the division’s health plan at $128,300,000. “You’ll see that figure as a $128,300,000,” Keogh said while walking members through the exhibit.
Keogh said the projected 2026 funding mix is employer contributions of $103.5 million, employee and retiree contributions of $17.5 million and a planned draw of $7.3 million from the health fund. “The health fund balance as of December 2025 … was $13,300,000,” he added, and with the board’s previously announced $5.8 million reversion…
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