Committee approves 2026 health insurance renewal with 3% increase and 15% 2027 cap

Gabe Johnson, chair of the Brainerd City personnel and finance committee, said the committee approved the city’s 2026 health insurance renewal after hearing a market review from a broker.

Adam, a representative of North Risk Partners, told the committee that proposals returned from the market ranged from about a 6.5% decrease to a 29% increase versus current rates and that Better Health Collective’s initial offer was a 9.5% increase. He said Sourcewell, the incumbent pool, submitted a revised renewal at a 3% increase for Brainerd City and affiliated entities and that, compared with earlier quotes, the revision “results in about $150,000 annualized savings for the city.” Adam recommended renewing with Better Health Collective/Sourcewell and noted the plan includes a 15% rate cap for the 2027 renewal.

The broker cautioned the committee about alternatives that appeared competitive on paper. He said multi‑year programs with fixed four‑year commitments can leave municipalities exposed because many municipal rate guarantees apply only for the first 12 months. He also said fully insured offers such as Medica can look attractive but have produced steep increases for some municipal groups in adverse claim years.

Committee members moved and seconded a motion to approve the renewal “as received from the Better Health Collective with an average 3% increase and a 15% rate cap for a 2027 renewal.” Finance staff clarified budget impacts during discussion; one member sought confirmation of the size of the projected savings compared with prior budget assumptions. The committee conducted a voice vote; members in favor said “I,” and the motion carried.

The committee’s action authorizes staff to proceed with the 2026 renewal under the terms presented; members did not vote on any related budget ordinance during the meeting.