Palm Coast Council backs offering HMO option, asks staff to study county clinic partnership

Palm Coast City Council on Tuesday directed staff to include a Blue Care HMO as a third employee health‑plan option for the 2026–27 plan year and to treat the year as a transitional period while preserving current employees’ right to remain on the city's PPO plan. The council’s guidance came after a staff presentation showing the self‑insured plan’s main cost drivers, stop‑loss protection and claims trends, and after a separate pitch for an employer‑run on‑site clinic.

The Human Resources director, Renina Fuller, introduced Brown & Brown senior account executive Brandon Savage, who told the council the city’s health plan is self‑insured and that administrative fees account for roughly 4 percent — about $345,000 — of total plan spend. Savage said the city's individual stop‑loss attaches at $175,000 and aggregate stop‑loss for the plan is about $895,000. He cited recent claim experience — three “large claimants” accounting for about 17 percent of claim spend, and one claimant that has exceeded stop‑loss to roughly $225,000 — as a factor that can drive premiums.

Savage proposed adding an HMO (Blue Care) option with an actuarial value similar to the current PPO and HSA plans but with narrower network parameters to help control medical claim costs. "Every member that shifts over there, their claims will cost about 4 percent less on the HMO plan versus the PPO," Savage said. He recommended treating 2026–27 as a transition year in which current PPO participants may remain on their plan but new hires would choose from the HMO or HSA options.

Council members debated the tradeoffs between cost savings and benefits competitiveness. Several members said the PPO is an important recruitment and retention tool; others favored the staff approach because it preserves access for existing enrollees while encouraging lower‑cost choices for new employees. After discussion, the mayor confirmed consensus to proceed with staff’s recommendation to offer the HMO option and allow current PPO participants to remain on the plan.

Separately, the council heard from Brian Branham of My Health On‑site, who described employer‑focused health centers that provide same‑day primary care, chronic‑disease management, on‑site dispensing of generics and occupational services (pre‑employment physicals, drug screens). Branham said a typical small municipal center is budgeted for roughly 32 provider hours per week and that, based on his firm’s experience and the city’s utilization profile, a stand‑alone city clinic could yield approximately $489,000 in net medical cost avoidance in year one after operating costs — provided utilization targets are met.

Council direction on the clinic was more exploratory: members asked staff to return with a more detailed cost analysis that includes (a) the county partnership option, (b) projected utilization and time to break‑even, (c) the effect on existing vendors such as MediQuik and LifeScan, and (d) employee surveys to test likely take‑up. Staff said it would follow up with those analyses and coordinate with Flagler County staff where appropriate.

What’s next: Staff will implement the guidance on the health‑plan menu for 2026–27, incorporate council feedback into open‑enrollment communications, and bring the clinic partnership and financial analysis back to council for a later decision. No formal ordinance or binding contract was approved at Tuesday’s workshop.