City projects $11M rise in healthcare claims; officials propose premiums and push clinic use

HR leadership told the committee on June 1 that the city's healthcare fund faces a large projected increase in claims in FY27 and outlined mitigation steps including premium increases and an expanded employee wellness clinic.

"Projected claims are the biggest driver," said HR staff, citing a roughly $11 million increase in claims for FY27. Staff proposed raising employee premiums by 15% (a range from $7 to $47 depending on plan coverage) and plan-design changes that staff estimated would save about $2.4 million for the healthcare fund. They also outlined a clinic-expansion plan adding physical therapy, nutrition services and extended Saturday hours to encourage employees and retirees to use a fixed-cost clinic model rather than fee-for-service providers.

Councilmembers probed whether clinic utilization targets would yield measurable savings and asked staff to model potential claim reductions at various clinic-uptake rates (for example, 20—50% employee utilization scenarios). HR agreed to run cost analyses showing how increased clinic usage would reduce claims and to provide a snapshot of current clinic throughput per day.

For the retiree/OPE fund, staff said the FY27 OPE request is roughly $34.499 million and attributed most of the increase to rising claims and additional retirees from police and fire; staff plan to raise retiree premiums and push retiree use of the wellness center.