Pursuant to City Council Resolution 6816, at the August 8, 2022 Study Session, the City Manager brought forward recommendations relative to the City's self-funded health insurance plan to produce structural changes to ensure Stay Well Health Insurance funding is both within the approved budget for Fiscal Year 2022-23 and the overall funding is enough to ensure plan solvency for the upcoming plan year. Further, these changes provide for sustainable funding in future years (attached as "August 8 City Council Presentation"). 

Despite a series of premium increases in 2021 and 2022 and the infusion of $6.25M in American Recovery Plan Act funds, the Stay Well Fund continues to operate at a deficit. A closer review into each plan shows that OAP1 has been underfunded and operating at a deficit for the past two years while OAP2 and Local Plus have been subsidizing the losses of OAP1, even while providing City-sponsored Health Savings Account contributions for participants in those two plans.  

An analysis of each plan by group enrollment shows that Active OAP1 is still functioning at a small loss while all Pre-65 Retiree enrollment is operating at a loss. Active Employees on OAP2 and Local Plus are subsidizing all other plan participants.  

The recommendations put forth by the City Manager on August 8, 2022 provide a multi-year plan to address Stay Well Fund perfomance and provide for a premium structure that better reflects actual usage and loss ratios by group.