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City consultants flag high‑cost claims; recommend telemedicine promotion, deductible changes and RFP for clinic model
Summary
Holmes Murphy presented employee‑health plan results showing several large high‑cost claims in 2025 drove reimbursements; consultants proposed raising deductibles, increasing ER copays, promoting telemedicine and issuing an RFP to evaluate an on‑site or near‑site clinic to reduce future claim costs.
A representative from Holmes Murphy summarized the city’s employee‑benefits performance and outlined several options to control rising health‑plan costs.
The consultant reported that 2025 included several very large individual claims (members with individual claims above the stop‑loss threshold) that produced nearly $5 million in stop‑loss reimbursements to the city last year. Holmes Murphy described stop‑loss coverage that reimburses individual claims above roughly $275,000 and said year‑to‑date claims were tracking better than the prior year, with pharmacy performing better than medical in the current plan year.
To reduce future cost pressures, the consultant proposed a menu of actions: modest increases to employee deductibles (Holmes Murphy modeled incremental deductible changes and said a $250 per‑person deductible increase produces an estimated six‑figure saving), raising emergency‑room copays to discourage nonemergency ER use, stronger promotion of existing telemedicine options (telemedicine co‑pay cited at $5 per visit), and issuing an RFP to evaluate clinic/near‑site models (on‑site clinic, shared clinic, virtual options) that could produce long‑term savings if employees adopt the service. The consultant noted that clinic models require sufficient employee participation to be cost‑effective and recommended a full RFP to compare vendor guarantees and services.
Council asked for retiree‑rate information and how civil‑service contracts limit plan design changes for police and fire. The consultant said retiree rates would be provided and that contractual constraints can limit some options but that there are still workable levers (deductible tiers, ER copays, telemedicine and targeted care management) that can be pursued now.
What’s next: staff and Holmes Murphy will provide retiree schedules, refined premium impacts for proposed deductible and copay changes, and an RFP scope for council consideration.
