Indian River County, Florida

Date	Ver.	Action By	Action	Result	Action Details	Meeting Details	Video
6/3/2025	1	Board of County Commissioners			Not available	Meeting details	Video

TO: The Honorable Board of County Commissioners

THROUGH: John A. Titkanich Jr., County Administrator

FROM: Suzanne Boyll, Human Resources Director

DATE: May 24, 2025

SUBJECT: Group Insurance Recommendations for Plan Year 2025/2026

__________________________________________________________________

BACKGROUND

Indian River County offers a comprehensive group insurance program for our employees and eligible dependents consisting of the below benefits. The Property Appraiser, Tax Collector, Clerk of Courts, and the Supervisor of Elections participate in the group benefits offered to the Board of County Commissioners (BOCC) employees. The Sheriff’s Office also participates in many of the same benefits; however, they offer different dental, vision and voluntary worksite benefits through different carriers.

The group benefit plan is an essential part of the employee benefit package and important to recruitment and retention efforts. The County has engaged the services of a professional benefits consultant, Lockton Companies, to review plan experience and provide recommendations to maintain a benefits package that is:

ü Affordable

ü Competitive

ü Sustainable

Recommendations for the upcoming plan year are summarized below and further detail in the agenda report and attachments.

Medical (TPA) Self Funded

Administrative Services (ASO) provided by BCBS of Florida

BCBS National Alliance Platform. Under current agreement ASO. Fee adjustment 10/1/25 from $46.74 to $48.14 PEPM. BCBS has provided a 4-year renewal proposal to hold this rate for 3 years, provide an additional $50K wellness upon approval by the BOCC, include performance guarantees, continue annual wellness contributions of $50K each October, and a 3% rate adjustment in the 4^th year of the agreement would be $49.58 (3%). Recommending renewal proposal with BCBS of Florida.

Pharmacy

RXBenefits Express Scripts (ESI)

Presidential Executive Order issued as well as Florida Prescription Drug Reform Act. Marketed RFP for pass through PBM model in alignment with the Executive Order and the Act. Recommending selection of Rightway PBM at a projected savings of $1.73M. Projected savings increases to $2.37M if GLP-1 coverage is limited to diabetes and excluded for weight loss. Currently plan covers GLP-1 medications for weight loss. Requesting BOCC to consider options and premium impact to group health plan.

Dental (TPA) Self-Self Funded

Administrative Services (ASO) Provided by Ameritas

ASO fee $3.75 PMPM. Marketed ASO for Dental. Recommending renewal with Ameritas with rate hold through 9/30/2028.

Vision

Eyemed

Rate hold extended through 9/30/2029. Employee single coverage is paid by BOCC.

Life / Disability

Mutual Omaha

Rate hold through 9/30/2026.

Critical Illness & Accident

Mutual of Omaha

Rate hold through 9/30/2026. Recommending to add Hospital Indemnity coverage as a voluntary employee paid option.

FSA / COBRA

P&A Group

Current agreement through 9/30/2026. However, due to service issues, Lockton has marketed the benefit. Staff is recommending we transition to Livelyme as FSA & COBRA provider.

Health Advocacy & EAP

Health Advocate

EAP: $1.73 PEPM through 7/31/2027. Core Advocacy $1.37 PEPM through 7/31/2027. Recommending Core Advocacy transition to Rightway at a PEPM cost of $2.25 providing expanded services and support to employees and covered dependents.

Elective Surgery

Lantern (formerly Surgery Plus)

Two-year extension of current agreement at PEPM of $4.25 through 6/30/27.

Diabetes Management

Kannact

Recommending discontinuing this program and transitioning participating members (25 enrolled) to the Marathon Health Center for ongoing support management of diabetes. Current costs are $3,500 per month / $42,000 annually.

Additional Voluntary Benefits Recommended for FY25/26

• Identity Theft Coverage - Recommending Norton Life Lock as voluntary employee paid option.

• Legal Plan Coverage - Recommending ARAG as voluntary employee paid option.

In order to continue to attract and retain employees, below is an overview of plan performance and the recommendations for the group insurance program for the plan year beginning October 1, 2025 through September 30, 2026.

ANALYSIS

Medical & Pharmacy Plan Performance

The County publishes the health fund performance each quarter with the distribution of the County Connection newsletter. Most recent plan performance through March 2025 indicates that claims experience for the medical and pharmacy benefit is exceeding budgeted premiums with loss ratio of 101.6% percent. Historical year end loss ratios are:

2024 - 91.4% 2023 - 93.8% 2022 - 86.6%

We continue to offer two plans - Premier Gold and Premier Silver plan. The monthly premiums are:

When comparing the period October through March 2024 to October through March 2025, the following trends are noted:

While our Medical/RX Administration remains unchanged, and our stop loss premiums have reduced, our Medical Claims and RX Claims are increasing substantially. Lockton provided the below information of what is driving the increase.

• 4.3% of 14.8% trend is being driven entirely by GLP-1s in the Brand med category

• Secondary trend drivers include Outpatient Surgery (2.5% of trend), Inpatient (2.5% of trend), and Office Visits (2.5% of trend)

• IRC has a higher illness burden than the norm (43.2% of members with at least one chronic condition, compared to the norm of 38.8%) and have a higher percentage of members with high/moderate risk (47.5%) compared to the norm (37.7%)

• From October 2023 through March 2024, there were 16 claimants over $50K totaling $1.59M and from October 2024 through March 2025, there were 29 claimants totaling $2.81M.

Our insurance trust is well funded with the most recent reported balance as of March 31, 2025 at $25,463,672. Annual claims for the upcoming plan year are projected to be $27,543,000 based on making a change that includes projected savings associated with moving the pharmacy benefit from RXBenefits ESI to Rightway. Budgeted premium contributions are projected to be $24,303,000 based on current premiums, resulting in a projected budgeted shortfall of $3,240,000. See attached Medical & RX Actuarial Funding Projections.

The County’s actuary is recommending additional funding to cover half of this shortfall. Although our insurance trust is well funded, it is recommended the BOCC consider an increase in the monthly premiums in an amount equal to $1.72M representing a little more than half of the projected shortfall. With the medical and pharmacy trend for 2026 projected at 7.5%, coupled with the growing impact of catastrophic claims-driven by rising pre-term birth rates, escalating labor and supply costs, and the emergence of advanced therapies such as cell and gene treatments and specialty pharmaceuticals-health plans must proactively prepare for significant future cost increases. Any remaining shortfall would be funded out of the trust.

The proposed premiums to continue the current plan benefits for the County’s two plans would be:

This increase includes a cost share where the employer picks up the majority of the $1.72M increase with the employer increase totaling $1,331,970 based on an employer paid increase of $45 for single and $77.50 for family coverage for both plans. The employee cost share for the Silver Plan would remain unchanged. The increased employee cost share under the Gold Plan would be $392,130 based on a $5 per month increase for single and $42.50 increase for family coverage.

As we review the pharmacy benefit below, there is an opportunity to avoid this recommended rate increase by making modifications to the pharmacy benefit to remove GLP-1 weight loss coverage from the County’s plan. GLP-1 medications would continue to be covered for diabetes. This option will be further explained under the Pharmacy Benefit.

Medical Administrative Services (ASO)

The administrative services for the medical plan transitioned to BCBS National Alliance effective October 1, 2023. Our current agreement is through September 30, 2026, and the ASO fee will increase from $46.74 per employee per month (PEPM) to $48.14 effective October 1, 2025. BCBS has submitted a proposal to amend our agreement through September 30, 2029. Below is an overview:

Under this amendment, BCBS would provide a $50K wellness incentive upon approval by the BOCC, a rate hold at $48.14 PEPM through September 30, 2028, annual wellness contributions of $50K each October, performance guarantees to include call center performance, claims accuracy, and timeliness, and a reduction in access fee percentages. Staff is recommending approval of this amendment.

Pharmacy

The current Pharmacy Benefits Administrator is RXBenefits and the Pharmacy Benefit Manager (PBM) is Express Scripts. A recent Executive Order issued on May 12, 2025 as well as the 2023 Florida Prescription Drug Reform Act (SB 1550) seeks to drive down prescription costs through transparent pricing and cost control. Pass-through PBM arrangements are mandated in Florida, however, there was still the opportunity to obscure true savings and increase their revenues through pricing spread, formulary structure, and rebates.

Lockton has completed a full marketing of the pharmacy benefit and completed an analysis for the upcoming plan year and the results are attached in the Pharmacy Marketing Results document.

Lockton has provided an RX Executive Summary of the Comparative Value of each proposal with and without rebates (see attached). Three propsals were evaluated from RxBenfits ESI (incumbent), SmithRX, and Rightway. Both RXBenefits and Rightway provided a best and final offer (BAFO). The savings under Rightway’s BAFO provides a Comparative Value Savings of $1,729,519. While providing greater Comparative Value Savings, Lockton is recommending Rightway as a better fit for our organization.

Under the two pieces of pharmacy transparency legislation: Florida PBM transparency law of 2023 SB 1550 and the May 12, 2025 Executive Order (EO) mandating Americans receive the lowest available global prices for prescription drugs

o Rightway’s transparency, neutral pricing model (no spread between prices the PBM pays and what they pass on to employers) is fully aligned with SB 1550 and the EO.

o RxBenefit/ESI incumbent is a traditional contract and does not comply. RxBenefits initially took the position that SB 1550 only applied to ERISA plans. In recent months, additional clarity has been provided and RxBenefits/ESI is now providing a pass through renewal to seek compliance with SB 1550 and the new EO.

Lockton has completed an analysis and evaluated the proposals from each bidder and is recommending the County select Rightway’s best and final offer (BAFO). Although SmithRX is offering greater projected comparative value savings, Lockton is recommending Rightway for the following reasons:

SmithRx’s proposal permits rebate guarantees to be offset by savings from clinical programs. However, this approach undermines the integrity of the rebate guarantee unless it is contractually secured. Furthermore, transitioning from a traditional pharmacy contract to a pass-through model for the first time, members are likely to experience a smoother journey with Rightway. This is due to their high-touch, member-centric approach and less aggressive clinical strategies. In contrast, SmithRx employs more assertive tactics, such as international sourcing. Given these differences, Rightway aligns more closely with IRC’s demographic needs.

Therefore, staff is recommending that the BOCC approve the selection of Rightway as our Pharmacy Benefit Manager (PBM), ending our relationship with RXBenefits/Express Scripts (ESI). Because this is a change in PBM, there will be some disruption to members; however, members will be provided with communication, tools and support to transition through the change using Rightway’s mobile navigation tool and high touch customer service. A Pharmacy Disruption Analysis is provided as an attachment.

GLP-1 State of the Market - Information from Lockton

• On average, 29% of self-funded groups are covering GLP-1 for weight loss in 2024 and 38% of government services employers.

• 56% of health plan members discontinue GLP-1s for weight loss in the first year.

• Obesity is costly but are GLP-1s the fix? We know healthcare costs for adults on an employer’s health plan with obesity are 43% higher than for adults at a healthy weight and are 79% higher for adults with severe obesity. However, there is no current return on investment data for employer health plans that cover GLP-1s for weight loss at the current price and given how these medications are currently used.

GLPS-1 Impact on the County’s Plan

In 2024, the County’s plan had 214 members utilizing 1,054 scripts (2024 incurred data) at an estimated cost of $1.2M to the plan. Because utilization of GLP-1 for weight loss has increased the impact on the plan is increasing.

Impact of Removing GLP-1 for Weight Loss

Lockton compared the savings from Rightway BAFO with the removal of GLP-1 for weight loss to the incumbent RXBenefits ESI BAFO it would result in a $2.37M projected reduction in costs from our current PBM. If the GLP-1 for weight loss continues to be covered by the plan, the savings is reduced to $1.62M.

Therefore, in addition to selecting Rightway as the County’s PBM, staff is recommending that the BOCC consider removing GLP-1 for weight loss coverage from the County’s pharmacy benefit in order to avoid a rate increase in the upcoming plan year FY25/26.

If the BOCC approves Rightway, but chooses to retain the GLP-1 coverage for weight loss under the County’s plan, staff is recommending the BOCC approve the below premium amounts effective October 1, 2025 with the majority of the cost share borne by the Employer, no increase in the employee premium for the Silver Plan, a $5 monthly increase in the employee premium for single coverage under the Gold Plan and a $42.50 monthly increase in premium for family coverage under the Gold Plan. If the BOCC elects to continue with RXBenefits, additional premium increases would be recommended.

Dental Insurance

Effective October 1, 2023, the County became self-funded for our dental insurance. Our current administrative service provider (ASO) is Ameritas. Two dental plans are offered - the Low Plan and the High Plan. Low Plan Dental insurance is provided by the County to all benefit eligible employees at no cost. Employees may elect to enroll family members and may also elect to buy-up to the High Plan for increased coverage. Premiums are reflected below:

Current, plan year performance through March 2025 indicates that the dental fund is performing at a 86.3% loss ratio. No funding action is required. Additionally, Lockton marketed the administrative services for the Dental Plan and staff is recommending we remain with Ameritas who provided a proposal to continue ASO services with no increase in fees through September 30, 2028 at the current rate of $3.75 per employee per month (PEPM). Lockton also recommended a plan change to provide cleanings 2x per year rather than every six months, making the scheduling of preventive visits less restrictive as you would not have to wait six months between cleanings.

Therefore, staff is recommending the BOCC approve renewing with Ameritas at the existing ASO rate of $3.75 PEPM through September 30, 2028, and modify the plan to provide cleanings 2x per year.

Vision Insurance

The vision insurance is offered through Eyemed. The County provides single coverage vision insurance to all benefit eligible employees at no cost. Employees may elect to enroll family members in the vision insurance.

Eyemed has provided a rate hold with no increase in rates through September 30, 2029.

Health Advocacy

This health advocacy benefit is offered through our Employee Assistance Program vendor, Health Advocate, at a rate of $1.37 per employee per month (PEPM). The renewal rate is through September 30, 2027. Staff is recommending we discontinue Health Advocacy through our EAP vendor and move to a more comprehensive advocacy benefit and navigation support through Rightway in conjunction with our recommended PBM change.

A comparison of the benefits and cost is below:

The Rightway offering provides for up to 3 single sign on integrations, and expands administrative support to include medical, pharmacy, dental, vision, ancillary benefits. Services include benefits education and access, help with finding and accessing care, billing advocacy and clinical guidance. In addition, there is a digital wallet that contains all of the members benefit ID cards (see Rightway Overview).

Staff recommends the BOCC approve replacing our Health Advocacy through Health Advocate with the Advocacy and Navigation benefit offered by Rightway at an increased cost of $.93 per member per month (PEPM) at a rate of $2.25 PEPM. The annual cost would be $47.5K reflecting an increase of $19,653. This expense is paid by the BOCC for all employees & dependents enrolled in the group health plan. This price increase is offset by a cost savings associated with the County’s Diabetes Management Program with Kannact.

Employee Assistance Program

Employee Assistance is provided to all County employees through Health Advocate. The current monthly premium is $1.73 per employee per month through September 30, 2027. The program is well utilized by employees and there are no changes recommended at this time.

Flexible Spending Accounts/COBRA

P&A Group provides flexible spending account administration at a cost of $3 per employee per month. COBRA services are provided at a cost of $0.50 per enrolled per month. Although we are in a multi-year agreement through September 30, 2026, numerous service issues resulted in Lockton marketing both Flexible Spending Account (FSA) and COBRA services. Proposals from EBC, Livelyme, Wex, and Helix were received and evaluated.

The attached FSA & COBRA Comparison reflects the proposals received.

Lockton recommended staff view demos from EBC and Livelyme. Following the demos, staff is recommending the BOCC move FSA and COBRA services to Livelyme at a rate of $.52 per employe per month for COBRA ($.02 PEPM increase) and $2.95 per participating employee per month for FSA services ($.05 PPEPM savings) There is an increased overall annual cost of $246. Staff requests the BOCC approve the recommendation to transition COBRA and FSA services to Livelyme.

Diabetes Management Program

The diabetes management program is administered by Kannact. Currently, the County is paying $3,500 per month/$42,000 annually for this program. 25 members are enrolled. Because we now have an onsite health center that is fully staffed, staff is recommending that the Kannact program be sunset effective September 30, 2025 and that participating members transition to the health center for support and assistance with managing their diabetes. If approved by the BOCC, staff will provide notice to Kannact and participants will be notified.

Elective/Planned Surgery with Lantern (formerly SurgeryPlus)

This elective/planned surgery benefit was approved by the BOCC in May 2021 with a July 1, 2021 implementation date. Net savings to date have been over $2M under this program. Staff has exercised the option of requesting to extend the rate of $4.25 per employee per month another two years through June 30, 2027. Staff requests the BOCC approve the extension with Lantern.

Basic Life & AD&D/Voluntary Life/ Short Term Disability (STD)/Long Term Disability (LTD)/Critical Illness & Accident

Mutual of Omaha (MOO) is our provider for life insurance, short term disability (STD), long term disability (LTD).

Life Insurance - Currently, the BOCC provides basic life insurance benefits of 1x annual salary up to a maximum of $200,000 and we offer supplemental life insurance for the employee, spouse and child(ren). Retiree insurance is also provided through MOO. We have a rate hold through September 30, 2026.

Voluntary Short-Term Disability - This is a voluntary employee paid benefit. We have a rate hold through September 30, 2026.

Long-Term Disability - Currently the County pays 100% of the LTD premiums for a two-year disability benefit with a 90-day elimination period for all benefit eligible employees and offers employees the option to elect buyup coverage to continue disability benefits through normal social security retirement age. We have a rate hold through September 30, 2026.

Critical Illness and Accident Insurance

The Critical Illness and Accident Insurance policies are also offered through Mutual of Omaha (MOO). These policies are voluntary and paid for by the employee. We have a rate hold through September 30, 2026.

Additional Employee Paid Voluntary Benefits

Staff is recommending the BOCC approve offering Hospital Indemnity, Legal Plan, and Identity Theft Program as employee paid voluntary benefits in addition to those currently offered.

Hospital Indemnity Program

The attached Hospital Indemnity Program Summary provides and overview of the benefit and premium cost for this benefit.

Staff is recommending the BOCC approve the addition of both a low and high hospital indemnity program through Mutual of Omaha at group rates providing a benefit for hospital admissions and authorize the Chair to sign related agreements upon review and approval by the BOCC for legal sufficiency.

Legal Plan

A legal plan provides cost effective legal help that members can use to proactively handle expensive legal matters. Lockton has provided additional information concerning this benefit and the proposals received from Legal Ease and ARAG on the attached Voluntary Benefits. Staff is recommending the BOCC approve the addition of both the ARAG Ultimate Advisor and Ultimate Advisor Plus plans to our group benefit program at group rates. This is a voluntary employee paid benefit.

Identity Theft Program

In addition to the Legal Plan, Lockton evaluated proposals from Allstate and Norton Life Lock, for an Identity Theft Program due to the increased risk that exists for identity theft. The attached Voluntary Benefits has a comparison of the proposals.

Staff is recommending the BOCC approve the addition of Identity Theft coverage offered by Norton Life Lock, offering both the Premier and Premier Plus plans at group rates. This is a voluntary employee paid benefit.

Supporting Employee Wellness

The County continues to support the health and wellness of employees by providing comprehensive group insurance as well as an onsite Employee Health Center in partnership with Marathon Health (formerly Everside). Since opening in October 2023, the utilization of the health center has steadily increased. During the past twelve months May 2024 through April 2025, the following highlights are noted:

• Eligible population: 3,906

• Engaged patients: 736 (18.8%)

• Average new engagement/month: 39

• Total visits: 2,863

• % Preventive visits: 30.6%

• % Acute visits: 47.0%

• % Lab visits: 22.4%

• Net Promoter Score: 91.6

BUDGETARY IMPACT

Below is a summary of the projected increase or decrease in costs for FY25/26 based on the recommended changes:

Sufficient funds are budgeted in the Employee Health Insurance Fund for Fiscal Year 2025/2026 for the group insurance program.

PREVIOUS BOARD ACTIONS

May 16, 2023 Board approval of BCBS Agreement for ASO Services

June 18, 2024 Board approval of Group Insurance Program

POTENTIAL FUTURE BOARD ACTIONS

N/A

STRATEGIC PLAN ALIGNMENT

N/A

OTHER PLAN ALIGNMENT

N/A

STAFF RECOMMENDATION

Recommended Action

Staff recommends and respectfully requests the Board of County Commissioners approve staff’s recommendation for the plan year beginning October 1, 2025 through September 30, 2026 to include amending our ASO services with BCBS providing for increased wellness funds, rate hold for two (2) additional years, reduced access fees, and performance guarantees; transition Pharmacy Benefits to Rightway and remove coverage for GLP-1 weight loss benefits (continue covering for diabetes) mitigating a rate increase; renewing Dental ASO with Ameritas to include modifying coverage for annual cleanings from once every six months to 2 times per year; moving COBRA and FSA services to LivelyMe; ending Kannact Diabetes Management Program effective 9/30/2025 and transitioning care to Marathon Health Center; extending our agreement with Lantern for elective surgery; continuing life, disability, EAP, vision, critical illness, and accident benefits with no increase in premiums; selecting Rightway to provide navigation and advocacy benefits in place of Health Advocate; adding voluntary employee paid group Hospital Indemnity, Identify Theft and Legal coverage as recommended by staff; and authorizing staff to take the necessary actions in support of implementing the approved actions and authorizing the Board Chair to execute necessary documents related to the approved benefits after review and approval by the County Attorney for legal sufficiency.