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City eyes plan redesign to contain health‑plan renewal after spiking loss ratio
Summary
Benefits consultant recommended consolidating to three plan designs and negotiating renewals to reduce an initial 22.5% medical renewal down to about 13%; the city would maintain roughly an 86.8% employer subsidy under the recommended option.
City benefits consultants presented results of a full RFP and renewal negotiations for the municipal employee health program. The consultant said the plan year loss ratio improved to 102.4% year to date from a 132.1% prior year number and that an initial renewal quote of about 22.5% (roughly $1.2 million) was negotiated down to 15% (~$808,000) through bidding and plan design changes; the consultant recommended a three‑option approach (two HSA HDHPs and one catastrophic OAP) that would reduce the renewal to roughly 13% (~$701,000).
Heath Haygood (HUB International) emphasized that the city currently funds about 86.8% of employee premiums, slightly above the public sector benchmark, and proposed preserving the city subsidy while adjusting plan design to limit premium impact. “Through the RFP process and our negotiations, we were able to negotiate that down to 15%, which is about $808,000 in additional annual premium,” Haygood said. The council heard about voluntary enhancements (hospital indemnity, identity‑theft protection) that would be employee‑paid and received no immediate objection to staff continuing the recommended plan consolidation and renewal negotiations.
