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Committee backs OHR budget as members warn $45.6 million health claims increase is unsustainable
Summary
The Montgomery County Government Operations Committee unanimously recommended the County Executive's FY26 Office of Human Resources budget — including a $120,000 management training request — but members pressed staff on a $45.6 million increase for group health claims and strategies to control pharmaceutical and medical inflation.
The Government Operations and Fiscal Policy Committee recommended the County Executive's FY26 budget for the Office of Human Resources (OHR) after hearing staff outline a $46.4 million increase to the office's recommended operating budget.
Staff told the committee the majority of the increase'approximately $45.6 million'is a claims-expenditure adjustment in the employee group health/self-insurance fund and was driven by rising medical and prescription costs, including new pricey therapies. The executive's package also includes a $120,000 request to support two Montgomery County Leadership Academy (MCLA) cohorts, $176,076 and two FTEs to shift customer service functions from TEBS to OHR, and $32,075 to maintain the NEOGOV applicant-tracking modules.
Director Anderson framed the training funding as a retention tool. "Manager failure is the number 1 reason that employees leave," she said, arguing investment in management development helps reduce turnover and strengthens county operations.
Council members praised the management-training proposal but repeatedly pressed OHR staff for a plan to address the large health-cost increase. Council Member Friedson called the $45.6 million change "a staggering number" and warned the trajectory is not sustainable, urging the county to develop a longer-term strategy to bring costs in line.
OHR's Jenna Shevlin described utilization-management measures adopted in 2024, including a Smart Logic program implemented Jan. 1 that realigned prescriptions with FDA approvals and produced reported savings. "The fact of the matter is the GLP-1s are here, they are here to stay," Shevlin said, noting the department is implementing guardrails on prescribing and promoting biosimilars where appropriate.
Committee members asked for follow-up information on the drivers of the SIF and options to contain costs. After discussion, Council President Stewart reported no objections to recommending the executive's OHR budget to the full council.
The committee requested additional documentation on the self-insurance estimate and on the proposed service shifts to OHR; staff said vacancy and recruitment details are in the packet and noted OHR had 22 vacancies as of April 2025, with 20 actively recruiting.
