Benefits consultant warns rising health costs could push New Canaan claims toward $22 million

At its Dec. 15 meeting, the New Canaan Board of Education heard a detailed presentation from benefits consultant Joe Spurgeon on the district's self-funded health plan and a preliminary projection that would raise total claims and fees to about $21.7 million.

Spurgeon, introduced as the district's benefits consultant, told the board the district is self‑insured and therefore "liable for all the claims that are incurred" and must maintain reserves and stop‑loss protection. He described the plan's individual stop‑loss attachment as $300,000 and explained there are two layers of stop‑loss: individual (per‑member) and aggregate (plan‑wide) protection. "You're only responsible up to $300,000," Spurgeon said of the individual stop‑loss point.

Why it matters: Spurgeon said the district's recent net paid claims have grown from roughly $1.1 million per month to about $1.5 million per month in the most recently completed year, and that high‑dollar claimants account for a disproportionate share of cost. "About 4.24% of your enrollment was driving 43.39% of your cost," he said, highlighting how a small number of members can drive volatility in premiums and stop‑loss pricing.

How Spurgeon built the projection: He said his approach uses the most recent 12 months of claims, backs out all claim dollars over the stop‑loss attachment point and then adds each such claim back at $300,000 to estimate plan exposure. Using an applied trend he described as roughly an 11% annual blend (medical ~11.5%, drug ~10.5%), Spurgeon said his model produced an expected claims projection just over $20 million, which after adding stop‑loss and fees led to a total projected cost near $21.7 million. He summarized that outcome as roughly a 9.98% increase over the current budget.

Stop‑loss and vendor considerations: Spurgeon said stop‑loss premiums have risen substantially in recent cycles and are a major driver of total cost. He described stop‑loss as a market the district can shop because changing stop‑loss carriers does not directly affect members' network access. He also said the district's stop‑loss premium is a placeholder at the time of the presentation and could improve if claims continue to run favorably: "That number can be much better if we continue to perform at the level we're performing," he said.

Board questions and follow up: Board members pressed Spurgeon on enrollment trends, employee premium shares, the usefulness of the district's $50,000 threshold for classifying "high‑dollar" claimants, and whether the $300,000 stop‑loss level could be adjusted to change premiums or reserve requirements. Spurgeon said many high‑dollar claimants are recurring and that moving the stop‑loss attachment point is an analyzable financial trade‑off that requires coordination with reserve policies and the town's share of reserve funding.

What the board will do next: Spurgeon said stop‑loss pricing cannot be finalized until March claims are available, which may come after the board's budget decisions. He and district staff said they will continue to update projections through the budget cycle and may run alternative scenarios (different stop‑loss attachment points; shopping carriers) for the board and town as part of the FY2027 process.

Representative quotes: "You're only responsible up to $300,000," Spurgeon said, describing the individual stop‑loss attachment point. "About 4.24% of your enrollment was driving 43.39% of your cost," he added when summarizing the concentration of high‑cost claims.

The meeting record shows no formal vote tied to Spurgeon's presentation; the item was an informational budget‑development briefing and will feed into the Jan. 5 budget unveiling and subsequent budget votes.

Ending: The board thanked Spurgeon for a detailed, technical briefing and directed staff and the consultant to continue refining projections and vendor options before the district finalizes its FY2027 budget package.