Broker urges council to consider self-funded health plan, warns of steep renewals under Blue Cross

Jason Powers of Legacy Brokers told the council that the city's current Blue Cross Blue Shield fully insured renewal carried a sharp increase and described three alternatives — fully insured, level-funded and self-funded — asking the council to consider returning to a self‑funded model to gain claims transparency and active cost management.

Powers, who said he has worked with the city on benefits since 2008, warned that health-plan trend increases average about 8–12% annually and that pharmacy is consuming a growing portion of claim dollars. "If we don't change anything, it's a 14% renewal from Blue Cross," he said, citing the carrier's proposed premium increase and a projected renewal that would add roughly $200,000 to the city's cost.

Why it matters: Powers said a self-funded model would give the city access to claims data and tools — including targeted pharmacy strategies and stop‑loss protection — that can reduce long-term cost growth. He presented a mirror-plan option with a higher stop‑loss attachment (he suggested $50,000) as a way to limit city risk while retaining potential surplus return. Powers also noted that level-funded plans may retain a portion of surplus, reducing the city's upside.

Council members asked whether employees should be surveyed and expressed concerns about out‑of‑pocket costs if plan design changes. Staff said they will collect additional information, circulate model details and return with a recommendation at a later meeting; no action was taken at this session.

Next steps: Powers will provide supplemental data and comparisons to staff. The council requested sample employee communications and said it wants more detail on projected multi‑year impacts before deciding.