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USI presents medical-plan numbers: city projects to finish the year about $1.4M under budget
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Summary
USI told the committee that year-to-date projections put total plan costs at about $119.2 million versus a FY budget just over $120 million, and that a blended overall cost increase of roughly 4.5% is projected for the next fiscal year (10% expected for fully insured Medicare-wrap plans).
Kate Kennedy, senior vice president with USI Insurance, reported the city’s self-funded medical plan was tracking slightly under the FY budget and walked the committee through key cost drivers and assumptions.
USI’s slides showed year-to-date active medical claims at roughly $60.4 million (projected to $85.84 million if run-rate continues), retiree claims annualized at roughly $28.6 million, and workers’ comp medical claims annualized near $4.09 million. Kennedy summarized projected total costs of $119,232,537 against a fiscal-year budget of approximately $120,000,627 — about $1.4 million under budget year-to-date — and pointed to material offsets that include pharmacy rebates (noted at about $9.618 million in the presentation).
Kennedy explained the firm’s assumptions for the FY27 budget: a 6.2% medical trend for self-funded claims, 8.5% pharmacy trend, an 11.7% assumed stop-loss increase, and an expected 10% increase for fully insured Medicare-wrap premiums. Blending those figures with the city’s mix of active and retiree populations, USI projected a blended total-plan increase of approximately 4.5% for the next budget year.
Committee members asked about HRA (health reimbursement arrangement) mechanics, pharmacy rebate treatment and the difference between self-funded and fully insured plan administration. Kennedy said self-funded plans are administered and paid as claims come in (with stop‑loss for very large claims) while fully insured plans have insurer-set rates; she also noted that no claims during the current period had exceeded stop-loss thresholds.
The committee did not take an immediate vote on benefit-design changes; the presentation provided data the council can use in further budget deliberations.
