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MCPS says negotiated terms and plan management aim to reduce employee-benefit deficit; drug costs remain a pressure
Summary
MCPS staff described a three-year approach to reduce an employee benefit plan deficit, citing negotiated administrative fee holidays with Cigna and vendor Aon work; staff warned GLP-1 drug spending drove recent increases and that costs have not yet fallen to projected levels.
MCPS staff updated the committee on efforts to reduce the district's employee-benefit-plan (EBP) deficit, describing a three-year plan that includes negotiated terms with insurers and vendor support. Ms. Alfonso Winter said MCPS negotiated better rates with Aon and a three-year pricing arrangement with Cigna that provides temporary administrative fee holidays as part of cost-management steps.
"We took several steps to correct the deficit…we negotiated better rates, for a 3 year with Cigna, our insurance provider, where they're going to give us a 6 month holiday for administrative fees this year," Ms. Alfonso Winter said, adding that plan-management changes and contracting actions are expected to reduce growth over time. At the same time, she cautioned that GLP-1 drug spending had materially increased program costs (from $24 million to $66 million and then $112 million in successive reporting), and staff said they are not yet at the point where revenues and expenditures are fully aligned.
Councilmembers asked for continued monitoring and for MCPS to include the EBP in future budget decision packages; staff said the EBP will remain a decision point in next year’s budget materials and that progress is expected over the three-year horizon.
