Consultants recommend Mount Clemens accept stop-loss renewal, offer two-year option to limit exposure

Consultants advising Mount Clemens on employee benefits recommended that the commission accept the city's stop-loss insurance renewal effective July 1, 2026, and take the carrier's guaranteed second-year option for July 1, 2027.

At a work session presentation, Jonathan Trianfi of Plant Moran Benefit Advisors said stop-loss insurance is the risk-management layer for the city's self-insured medical plan and "protects against catastrophic financial loss." He described two components: specific (individual) stop-loss, which caps the city's obligation per family unit, and aggregate stop-loss, which limits the city's liability if total plan claims exceed a set threshold.

Trianfi said the city currently carries a specific attachment point of $80,000 per family unit and an aggregate attachment point of $2,110,000. He presented projected costs for the renewal period beginning July 1, 2026: an expected premium increase of about 9.5 percent (roughly $42,000 annually based on current headcounts), a figure Trianfi said is favorable compared with market averages of 14—6 percent.

The carrier also offered a guaranteed second-year renewal for July 1, 2027, at an estimated 9 percent increase (about $44,000) that would accompany raising the specific attachment point to $85,000. Trianfi framed the two-year option as a hedge against larger future increases, noting the market's volatility and the fiscal risk posed by isolated, very high-cost claims such as recent gene therapies that have cost several million dollars.

Trianfi said the plan's current performance meant the stop-loss carrier did not require an increased aggregate threshold at renewal, which he interpreted as a sign the plan is performing well. He also warned that administrative constraints limit the universe of stop-loss carriers the city can practically access because Blue Cross Blue Shield of Michigan, as plan administrator, supports only a small set of outside stop-loss carriers.

Commissioners asked questions about employee experience and timing: Trianfi clarified that while the stop-loss policy year runs July 1 to June 30, employees experience deductible and out-of-pocket resets on a calendar-year basis (Jan. 1). He also flagged that statutory payroll contribution caps (for example, a 2.3 percent cap mentioned in the presentation) can shift costs to employees if plan cost increases exceed the cap.

Recommendation and next steps: Trianfi's stated recommendation was to accept both the 2026 renewal and the second-year guaranteed option for 2027. The presentation ended with commissioners thanking the consultants; the transcript records discussion and questions but no formal approval or roll-call vote on the stop-loss renewal during the work session.

Context: The consultants characterized aggregate stop-loss events as rare but high-impact, and they recommended keeping aggregate coverage given its relatively low cost and protective value. They noted the broader market has been hardening but that Mount Clemens' projected renewal is below current market-average increases.