DEPARTMENT: Human Resources
FILE TYPE: Regular Action
TITLE
title
Approval Of 2027 Medical Plans And Premium Rates
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RESOLUTION
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WHEREAS, proposed premium rates for 2027 have been identified considering utilization and claims experience of the three Plans, medical trend, Affordable Care Act fees, and administrative expenses; and
WHEREAS, self-funded medical plan expenses projected for 2027 result in an aggregate rate increase of 9.10%; and
WHEREAS, due to 2027 Internal Revenue Service (IRS) limit changes in minimum deductibles for High-Deductible Health Plans, the Dakota Health Savings Account (HSA) plan will have an increase in deductible, $1750 for single and $3500 for family; and
WHEREAS, this change will increase the County annual HSA contribution to $875 for single and $1750 for family enrollment.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby approves the aggregate rate increase overall of 9.10% to the self funded medical plan, Dakota Advantage Plan will increase by 11%, Dakota Select Plan by 7.25% and the Dakota Health Savings Account Plan will increase by 5.25%; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby approves the Dakota Health Savings Account medical plan increase in deductible; $1750 Single and $3500 Family set by the IRS which increases the County annual HSA contribution to $875 for single and $1750 for family enrollment.
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BACKGROUND
The County’s self-funded medical plan is administered by Blue Cross Blue Shield of Minnesota. The County continues to offer three medical plan options to employees. The County’s base plan is the Dakota Advantage Plan which is a low deductible plan with a Health Reimbursement Account and in which most employees are enrolled. The two optional plan offerings are the Dakota Select Plan-a low-deductible plan with a Health Reimbursement Account-and the Dakota Health Savings Account Plan, a high-deductible plan with a Health Savings Account.
The medical plan design changes include an annual $1.00 increase for pharmacy benefit co-pays in the Dakota Advantage and Dakota Select plans.
The Dakota Health Savings Account plan will have a change in deductible and County Health Savings Account Contribution. The change in deductible for the Dakota Health Savings Account is due to the IRS change in limits for all high-deductible health plans, 2027 minimum annual deductible is changing to $1,750 for self-only coverage (up from $1,700 in 2026) and $3,500 for family coverage (up from $3,400 in 2026). This will increase the County Health Savings Account contribution to $875 (from $850 in 2026) and $1750(from $1700 in 2026).
With the assistance of Deloitte Consulting LLP, proposed premium rates for 2027 have been identified considering projected utilization and claims experience of the three plans, medical trend, Affordable Care Act fees, and administrative expenses.
The recommended 2027 rates include an overall aggregated increase of 9.1% increase on average for all three medical plans. Each medical plan will have rates set based on enrollment and claims utilization. Rates will increase at 11% for the Dakota Advantage plan due this plan has highest enrollment and claims utilization, rates will increase at 7.25% on Dakota Select and Dakota Health Savings Account will increase by 5.25%. Employees will see a biweekly premium increase from $1.68 up to $36.40, depending on the medical plan they elect to enroll in and coverage for 2027. Recommended rate details are provided in the Attachments.
RECOMMENDATION
recommendation
Staff recommends approval.
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FINANCIAL AND STAFFING IMPACTS
The overall growth in County premium costs aggregated across all plans is approximately 9.10% which is reflected in the County Manager recommended 2027 budget.
PREVIOUS BOARD ACTION
25-434; 9/23/25
24-454; 9/24/24
ATTACHMENTS
Attachment: 2027 Medical Plan Summary Comparison
Attachment: 2027 Medical Full and Part-Time Rates
Attachment: Presentation Slides
CONTACT
Department Director: Andy Benish
Author: Shannon Welle