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Scott County staff outline HSA options, model potential $2.56M in premium savings
Summary
County staff briefed commissioners on offering Health Savings Account (HSA) options in 2027, describing a five‑month transition year, two planned open enrollments, and financial models showing up to $2.56 million in theoretical premium savings if all employees switched; staff expect roughly a 10% first‑year migration and will return recommendations in August.
Scott County officials presented a primer on Health Savings Accounts and high‑deductible health plan options Wednesday, laying out the mechanics of HSAs, a short transition schedule this year and financial modeling that shows material premium‑savings potential if employees migrate to the new plans.
Benefits staff told the board the county is changing its plan year to the calendar year and will run two open enrollments to enable an HSA offering in 2027. To accomplish the change without disrupting coverage, the county will use a five‑month short plan year (Aug–Dec) this cycle; employees must complete their elections through the county’s Workday system, staff said.
Staff explained HSAs are employee‑owned, portable accounts that must be paired with a high‑deductible health plan. They contrasted HSAs with Flexible Spending Accounts (FSAs) and the county’s Health Care Savings Plan (HCSP), noting FSAs are annual "use it or lose it" accounts and the HCSP is a post‑employment account administered through labor groups. Staff said the county currently contributes $25 per month to the HCSP for participating groups.
On plan design, staff described three levers the board must weigh: premium share (the county’s and employees’ split), the deductible and out‑of‑pocket maximums, and whether the county contributes directly to employees’ HSAs. Staff said the county’s current labor contract premium splits are roughly 90/10 for single coverage and 75/25 for two‑party coverage.
Danny, who walked commissioners through financial scenarios, presented two illustrative HDHP options (one lower‑deductible and one higher) and modeled premium‑savings outcomes. "If you maximize that savings on premiums, if every employee were to go to that, it's about $2.56 million in savings to the health insurance plan," he said, adding roughly $2 million of that would nominally accrue to the county and about $515,000 to employees under the county’s current premium distribution assumptions.
Danny also modeled employer contributions into HSAs as a share of the deductible. Under one example—contributing 25% of the annual deductible—the county’s direct contribution to employees’ HSAs would be roughly $333,000 in the scenario modeled, with employees realizing additional savings depending on whether they direct their premium savings into the account.
Commissioners debated whether the county should seed HSAs to accelerate migration. Staff and consultants advised there is a tradeoff: employer seed money increases uptake but shifts a larger share of savings to employees in the short term. Staff said Gallagher (the county’s benefits consultant) expects modest initial migration—about 10% in the first year—unless incentives are used to encourage enrollment.
Several commissioners urged caution for lower‑income workers who might face catastrophic costs early in a transition and suggested initial employer contributions closer to the 20–25% range rather than larger seed amounts. Staff said the insurance committee will solicit employee feedback and return a formal recommendation by the end of August.
Key numeric limits cited in the briefing included staff statements of 2026 FSA limits (dependent care: $3,400; medical FSA: $7,500 per household) and 2027 HSA/deductible parameters mentioned by staff (2027 minimum HDHP deductible stated in the briefing: $1,750 single and $3,500 family; maximum HSA contribution stated as $4,500 single and $9,000 family; staff cited an out‑of‑pocket maximum of 8,700 for single and stated "17" for family in the presentation). Staff emphasized these figures were illustrative and that final plan designs will be returned when 2027 renewal numbers are available.
Next steps: staff said they will bring insurance‑committee recommendations to the board in August, along with the final plan options, contribution proposals and any recommended employer HSA contribution. Commissioners asked for further market comparisons and for data on peer counties’ migration rates to inform the final decision.
