DATE: November 3, 2026
TO: Board of Supervisors
SUBMITTED BY: Hollis Magill, Director of Human Resources
SUBJECT: Plan Year 2027 County Health Insurance Premium Contribution Amounts for Unrepresented and Management Employees
RECOMMENDED ACTION(S):
TITLE
Approve the County’s Health Insurance Premium Contribution for Plan Year 2027 for Unrepresented and Management (including Senior Management, Senior Management Supervisor, Assistant Department Head, Department Head, and Elected Official) classifications, effective December 21, 2026.
REPORT
There is an estimated $510,746 increase in Net County Cost (NCC) for fiscal year 2026-27 associated with the recommended action. Approval of the recommended action would increase the County’s total health insurance premium contribution for Plan Year 2027, effective December 21, 2026. Impacted department appropriations will be monitored, and adjustments will be brought to your Board if needed. This item is countywide.
ALTERNATIVE ACTION(S):
If your Board were not to approve the recommended action, the County’s Health Insurance Premium Contribution would remain unchanged for Unrepresented and Management classifications.
FISCAL IMPACT:
The total estimated cost for FY 2026-27 is approximately $1,776,264; $510,746 in NCC. The total estimated cost for FY 2027-28 is approximately $3,298,776; $948,528 in NCC. Impacted department appropriations will be monitored, and adjustments will be brought to your Board if needed.
DISCUSSION:
1. Proposed Biweekly Contribution Amounts for Plan Year 2027
Approval of the recommended action will set the County’s biweekly Health Insurance Premium Contribution amounts, effective December 21, 2026, as follows:
• Employee-only coverage: The biweekly contribution will be $460
• Employee plus Spouse coverage: The biweekly contribution will be $1,007
• Employee plus Child(ren) coverage: The biweekly contribution will be $871
• Employee plus Family coverage: The biweekly contribution will be $1,415
2. County Employee Health Insurance
The County has participated in the San Joaquin Valley Insurance Authority (the “SJVIA”) for active and retiree health coverage since October 6, 2009. The SJVIA offers the employees of Fresno and Tulare Counties fully insured options, including the Kaiser HMO and Kaiser High Deductible Health Plan (HDHP) and self-insured plans, including the EPO 500, EPO 1000, and High Deductible PPO plans. Under the fully insured Kaiser plans, the County and its employees pay premiums directly to Kaiser. However, under the self-insured plans, the County and employees directly share the cost of medical care.
The self-insured structure allows the County and employees to avoid paying additional fees to traditional insurance companies when claims are low, which can lead to lower premiums the County enjoyed during Plan Years 2025 and 2026. However, when claims increase significantly, self-funded plans need to be adjusted to stay financially sustainable.
3. Self-Insured Plans’ Claims Experience
The table below shows claims experience for Plan Years 2023 through 2025.
Year % Increase Total Medical Prescription
2025 21% $72,990,409 $50,171,520 $22,818,890
2024 16% $60,373,777 $42,715,389 $17,658,388
2023 - $52,207,170 $37,534,980 $14,672,190
As the table demonstrates, claim costs have increased significantly since 2023. In addition, Plan Year 2026 claims year-to-date (through October 19) have exceeded Plan Year 2025 claims by over $735,000, with twelve (12) weeks remaining in the plan year.
A major cause of these increases is an increase in the number of dependents covered by the self-insured plans. Since 2022, the self-funded plans have added more than 1,000 dependents. Additional cost drivers were:
• Increased high-cost claims. From July 2024-June 2025 to July 2025-June 2026 -
o High-cost claims increased by nearly 45%, from 127 to 184;
o High-cost claim expenditures increased nearly 92%, from $15.5 million to $29.8 million; and
o The average high-cost claim increased 32%, from $122k to $162k.
• Spouse claims accounted for more than $6 million in expenses.
• GLP-1 medications used for weight management and obesity treatment accounted for approximately $3.04 million in expenses.
For reference, enrollment in the self-insured plans is as follows:
• Employee-only Coverage: 2,743 or 57% of enrolled employees
• Employee plus Spouse Coverage: 370 or 8% of enrolled employees
• Employee plus Child(ren) Coverage: 1,103 or 23% of enrolled employees
• Employee plus Family Coverage: 589 or 12% of enrolled employees
4. Financial Sustainability
The SJVIA has built reserve cash flows and established a strong financial position in recent years. However, since July of 2025, claim costs have significantly exceeded premiums - the loss ratio for FY 2024-25 was 96.7%, while the loss ratio for FY 2025-26 increased to 108.6%. This led to a decline in SJVIA reserve cash flows from approximately $44 million on December 15, 2025 to approximately $26 million on October 5, 2026. If decisive actions had not been taken related to the structure and cost of the self-insured plans, the County would have risked the necessity of loaning funds to the SJVIA to cover claims, which last occurred in 2016.
Therefore, the County worked with its labor partners (through the Health Benefits Advisory Committee), its benefits consultant (USI Insurance Services) and SJVIA leadership to strengthen the financial position of the SJVIA and make the self-insured plans sustainable going forward. The result of these efforts was the determination that the costliest plan (the Yosemite EPO plan) needed to be eliminated, and deductibles and additional copayments needed to be added to the EPO 500 and EPO 1000 plans. In addition, the SJVIA allocated approximately $1.5 million from reserves to further reduce premiums by an additional two (2) percentage points.
These changes significantly reduced the original projected premium increase of 37% across all self-insured plans, while addressing the need for long-term plan sustainability. If the County determines that claims experience is rising to an unsustainable level, mid-year plan or rate adjustments may be necessary to ensure the plan remains financially viable and able to meet its obligations.
REFERENCE MATERIAL:
BAI #34, October 7, 2025
ATTACHMENTS INCLUDED AND/OR ON FILE:
Additional Information
CAO ANALYST:
Sevag Tateosian