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City hears proposals to curb rising health costs; officials consider higher out‑of‑pocket maximum and ER coinsurance
Summary
Alliant consultant presented a benefits renewal projecting an 8.5% baseline increase (~$656,000). Recommendations include raising individual out‑of‑pocket maximums by $1,000, adding 20% coinsurance for avoidable ER visits, using a lower‑cost radiology network and virtual physical therapy; net projected increase is $267,911 (3.46%) with no change to employee contributions.
An Alliant benefits consultant presented the City of South Fulton’s 2026–27 employee benefits renewal to the council on July 14, describing a transition to a partially self‑funded health plan with Anthem and a projected baseline cost increase of about 8.5 (approximately $656,000).
To reduce the net increase, the consultant proposed four main cost‑management measures:
• Increase individual out‑of‑pocket maximums by $1,000 (projected savings to the city: roughly $136,000).
• Modify emergency room cost sharing for avoidable visits by adding a 20% coinsurance component to the current $150 flat copay (projected savings: ~$30,000). The consultant said about 0.5% of ER visits were considered avoidable and cost roughly $2,500 each compared with $150–$200 for urgent care or primary care alternatives.
• Use a negotiated ‘Know the Cost’ network for outpatient radiology to secure lower rates and waive member cost at certain centers (projected savings: ~$100,000 annually).
• Offer an optional virtual musculoskeletal program (virtual physical therapy) to reduce surgeries and pricey clinic visits (projected savings: ~$124,000).
Taken together, those measures would reduce the estimated net increase to $267,911 (about 3.46% for the plan year). The consultant said there would be no change to employee contribution rates and that the programs that produce the savings would be optional for employees; the out‑of‑pocket maximum increase and ER coinsurance would be changes to plan design that members would see if they incur catastrophic or ER costs. Open enrollment is scheduled for Aug. 10–21 and any changes would take effect Oct. 1.
Why it matters: The council must weigh tradeoffs between limiting budget growth and shifting more exposure to employees in rare catastrophic medical years. The consultant framed the design changes as being below municipal benchmarks and federal limits for 2026.
What’s next: Staff and council will review the recommendations and proceed with the open enrollment communications and education plan if approved.
