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Consultants urge removing fixed PPO out‑of‑pocket cap from code and adding lower‑cost plan option
Summary
Deloitte told the committee the Metro code’s fixed $1,000 individual PPO out‑of‑pocket maximum limits the benefit board’s flexibility and recommended removing the provision, pursuing plan design changes and modeling a distinct lower‑cost third plan that could be effective earliest in early 2029.
Angela Watts of Deloitte presented three recommendations to the Study and Formulating Committee: remove the fixed PPO out‑of‑pocket maximum language from Metro’s code of laws, consider targeted PPO and HRA plan design changes to improve affordability, and add a third, lower‑cost plan option that offers employees a meaningful choice.
"The recommendation is to remove the PPO out of pocket maximum definition from Metro's code of laws," Watts said, noting the code currently specifies that the annual out‑of‑pocket maximum for individual PPO coverage shall be $1,000. Deloitte argued that the code language prevents the benefit board from making timely plan design changes and that removing it would allow the board to respond to evolving costs, subject to board and council oversight.
Deloitte showed benchmarking that found Metro’s PPO and HRA are richer than peer medians and highlighted differences in deductibles, out‑of‑pocket caps and prescription drug tiers. Watts recommended modeling guardrails — for example, tying contribution ceilings to peer medians or a target percentage of gross pay — and stressed any new plan would require actuarial determinations and, for a new vendor, an RFP procurement process.
Committee members noted a prior 2021 committee recommendation that similarly sought to give the benefit board greater authority with council review; committee counsel (Nikki) said that recommendation was made in 2021 but was not enacted by ordinance. Deloitte estimated the earliest realistic effective date for a new third plan would be January 2029, given the approvals, modeling and procurement involved.
The committee asked Deloitte and USI to model scenarios — moving the PPO closer to peer median and modeling a lower‑cost plan option — and to return results for the July 13 meeting. No committee vote was taken on removing the code language during this session; members framed the conversation as recommendations and requests for further modeling.
