FCPS staff explain self‑funded health plan and options to control rising claims costs

Frederick County benefits staff briefed the personnel committee March 9 on how the division’s self‑funded health plan works and where officials can adjust plan design to manage rising costs.

A presenter explained that under a self‑funded arrangement the division pays claims directly and therefore bears year‑to‑year variability driven by medical inflation, high‑cost claimants and prescription‑drug spending. "We are a self‑funded plan," the presenter said, noting that self‑funding allows more customization but also greater unpredictability in annual costs.

Staff walked the committee through two common plan types offered to employees: a PPO with higher premiums and a lower deductible and a high‑deductible plan that pairs with a health savings account. As an illustrative example, benefits staff presented a $10,000 in‑network outpatient surgery scenario showing employee out‑of‑pocket totals under each plan; the presenter said the district pays the larger portion of high claims under either design and contributes $1,000 to employee HSAs for those on the high‑deductible plan.

The committee discussed plan design levers — premium splits, deductible levels and HSA contributions — that staff can adjust to reduce fund volatility while attempting to limit monthly premium increases for employees. Staff said final decisions will balance employee financial wellbeing and budget stability.

No formal changes were proposed at the meeting; staff said they are reviewing options and may present recommendations in budget meetings.