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Board reviews insurance‑pool feasibility, stop‑loss options and HSA proposal; May decision targeted
Summary
Scott County staff reviewed a feasibility study on joining a regional self‑insurance pool, modeled stop‑loss thresholds, and proposed offering a high‑deductible/HSA option; staff will return with quotes and cost scenarios and requested a board decision in early May.
Scott County staff presented a feasibility study and renewal analysis for the county’s self‑insured health plan and outlined two near‑term decision points: whether to join a regional insurance pool (via a joint powers agreement) and whether to add a qualified high‑deductible/HSA plan option.
The feasibility analysis, performed with Gallagher, showed different outcomes depending on pool membership. Staff said a standalone projection for Scott County’s 2027 renewal was roughly 8.6% (with an 8.3% figure presented in the renewal slides) while a pooled scenario could reduce the county’s projected increase to about 8.0% depending on members. "From being in the pool with all of these participants, if we were not in the pool, their projections would have us at 8.6%," the presenter said.
Presenters emphasized tradeoffs: pools can smooth volatility because larger membership increases stop‑loss capacity, but joining means shared governance, weighted voting and some loss of direct plan control. Staff outlined governance guardrails under discussion (for example, a draft limit to prevent any single participant from exceeding a 40% share) and said Department of Commerce staff had not provided timely guidance on statutory language, so counsel recommended moving forward with JPA/bylaw drafting while soliciting member feedback.
On renewal mechanics, Scott County’s fund reserves were described as about $10 million (roughly 7.8 months of coverage). The county’s recent stop‑loss experience was a major driver of premium increases: individual stop‑loss attachment was $225,000 and several high‑cost claimants in the last plan year produced large reinsurance payouts.
Staff asked the board to consider pricing several stop‑loss scenarios (examples at $250k, $275k and $300k) and said Gallagher would return quotes. "I would be looking at going up to $300,000," one staff speaker said when discussing a balance between premium savings and aggregate exposure.
On plan design, staff proposed adding an HSA‑eligible qualified high‑deductible plan (examples shown: $3,400 individual/$6,800 family and a $5,000/$10,000 variant) and explained common employer/employee sharing approaches (employer seed contributions and shared savings). Presenters noted preventive care remains covered; they also flagged anticipated union questions and bargaining obligations because changes to employee coverage are a mandatory subject of bargaining.
Concerns raised by commissioners and employee‑committee members included governance and member engagement in a pooled structure, potential adverse selection if employees self‑select plans, and communications to employees worried about a perceived "bait‑and‑switch." Staff committed to preparing detailed cost scenarios, bargaining analysis and communications materials and returned stop‑loss quotes before asking the board for a decision.
Next steps: Gallagher will price the stop‑loss thresholds; staff will prepare HSA cost/savings scenarios and a bargaining/legal memo. Staff recommended a work session in early May and a board action item the second meeting in May; the board did not vote in this workshop.
