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HomeMy WebLinkAboutResolutions - 2026.08.13 - 43083 AGENDA ITEM: Approval of High Deductible Health Plan (HDHP) Design and Health Savings Account (HSA) Funding Parameters for Non-Union Employees DEPARTMENT: Human Resources MEETING: Board of Commissioners DATE: Thursday, August 13, 2026 9:30 AM - Click to View Agenda ITEM SUMMARY SHEET COMMITTEE REPORT TO BOARD Resolution #2026-6879 Motion to approve the following High Deductible Health Plan (HDHP) design and Health Savings Account (HSA) funding parameters for non-union employees: (1) the HDHP annual deductible shall be established at the IRS minimum for the 2028, 2029, and 2030 plan years; (2) the County's employer HSA contribution shall be front-loaded in the first paycheck of each calendar year; and (3) the County shall fully fund the HDHP deductible through employer HSA contributions for the 2027 and 2028 benefit years. ITEM CATEGORY SPONSORED BY Resolution Brendan Johnson INTRODUCTION AND BACKGROUND In 2024, the County first offered a High-Deductible Health Plan (HDHP) and Health Savings Accounts (HSA), with the goal of enrolling 50 employees and then building interest in the plan over time. Oakland County is achieving these goals, with 2024 enrollment of 53 employees, 2025 enrollment of 103 employees, and 2026 enrollment of 303 employees. The deductible set for the HDHP has been set at the IRS minimum each of these years. The key benefits of an HDHP include: Low/No Per Pay Period Premium Contribution: Because the employee assumes more risk, contributions are zero/very low, leaving more disposable income to save within the HSA or for other household needs. Free Preventive Care: The HDHP covers in-network preventive care (ie, annual physicals, routine cancer screenings, and immunizations) at 100% before deductible. Access to a Health Savings Account (HSA): An HSA is a "triple-tax-advantaged" savings account. Employees can contribute pre-tax dollars, the funds grow tax-deferred, and withdrawals are completely tax-free when used for qualified medical expenses. Long-Term Wealth Building: Unlike Flexible Spending Accounts (FSAs), HSA funds roll over from year to year. Catastrophic Protection: Once the annual out-of-pocket maximum is met, the plan pays 100% of covered services, protecting employees in the event of a substantial medical event. Human Resources hopes to build on the momentum of growth in our HDHP by adopting the following parameters applicable to non-union employees: 1. Set the HDHP deductible to the IRS minimum for 2028, 2029, and 2030. 2. Front-load the employer HSA contribution in the first paycheck of each calendar year. 3. Fully fund the HDHP deductible through Health Savings Account (HSA) contribution for benefit years 2027 and 2028. POLICY ANALYSIS Enrollment in Oakland County's High Deductible Health Plan (HDHP) has increased significantly since its introduction in 2024, demonstrating growing employee acceptance of the plan. Human Resources recommends establishing the HDHP deductible at the IRS minimum for the 2028–2030 plan years, front-loading the County's employer HSA contribution each calendar year, and fully funding the HDHP deductible through employer HSA contributions for the 2027 and 2028 benefit years for non-union employees. Approval of these parameters will support continued growth in the HDHP, provide consistency in plan administration, and enhance the value of the County's employee benefits. The Internal Revenue Service (IRS) establishes the minimum deductible and other qualifying requirements for High Deductible Health Plans (HDHPs) on an annual basis through inflation- adjusted guidance. These amounts are published each year and must be met for an HDHP to remain eligible for Health Savings Account (HSA) participation. Because the IRS has not yet established the minimum deductibles for the 2028, 2029, and 2030 plan years, this recommendation authorizes the County to adopt the IRS minimum deductible as published for each applicable year, ensuring continued compliance with federal requirements without requiring future Board action solely to reflect annual inflation adjustments. Fiscal Impact There is no fiscal impact at this time as these proposed changes are anticipated to be cost-neutral or as a savings to the County. FISCAL IMPACT: No Budget Amendment Needed Committee members can contact Barbara Winter, Policy and Fiscal Analysis Supervisor at 248.821.3065 or winterb@oakgov.com or the department contact persons listed for additional information. CONTACT Heather Mason, Manager Human Resources Katelyn Marvin ITEM REVIEW TRACKING Aaron Snover, Board of Commissioners Created/Initiated - 8/13/2026 AGENDA DEADLINE: 07/30/2026 4:30 PM ATTACHMENTS 1. HR - Memo HDHP-HSA Proposal 2027 2. HDHP HSA Proposal 2027-2028 COMMITTEE TRACKING 2026-08-05 Legislative Affairs & Government Operations - Recommend to Board 2026-08-13 Full Board - Adopt Motioned by: Commissioner Penny Luebs Seconded by: Commissioner Robert Hoffman Yes: Charles Cavell, Ann Erickson Gault, Marcia Gershenson, Robert Hoffman, Brendan Johnson, Karen Joliat, Christine Long, Penny Luebs, Gwen Markham, William Miller III, Kristen Nelson, Robert Smiley, Yolanda Smith Charles, Michael Spisz, Linnie Taylor, David Woodward (16) No: None (0) Abstain: None (0) Absent: Michael Gingell, Philip Weipert (2) Passed OAKLAND COUNTY EXECUTIVE DAVID COULTER Sunil Asija, Human Resources Director 2100 Pontiac Lake Road | L. Brooks Patterson Building 41W | Waterford, MI 48328 | Fax (248) 452-9172 | OakGov.com TO: Brendan Johnson, Chairperson Legislative Affairs and Government Operations David Woodward, Chairperson Board of Commissioners FROM: Sunil Asija, Human Resources Director Heather Van Poucker, Deputy Director Human Resources DATE: August LAGO RE: High-Deductible Health Plan (HDHP) & Health Savings Account (HSA) Funding Recommendations BACKGROUND: In 2024 the County first offered a High -Deductible Health Plan (HDHP) and Health Savings Accounts (HSA). At launch, the goal was to have 50 employees enroll and then build interest in the plan over time through word of mouth and additional informational/educational efforts. We are achieving these goals and hope to build on the momentum of these first three years.  2024: 53 enrolled  2025: 103 enrolled  2026: 303 enrolled BENCHMARK: 74% of employers offer HDHPs with average deductibles of $2,000/$4,000. On average, an employer funds 44% of the deductible. The County’s HDHP has deductibles of $1,700/$3,400 (the minimum permissible by the IRS) and this year funded 100% of the deductible through the HSA. ANALYSIS & RECOMMENDATION: Since launching in 2024, 15 % of new employees have elected the HDHP, and we anticipate participation will grow workforce-wide in the coming years. However, we expect PPO1 will remain the most popular option. There is no plan or intention to significantly alter or eliminate the PPO1 plan. The goal is to create real choices and distinct options for our workforce. Moreover, through the HDHP we can offer a true zero-dollar healthcare option for employees and their children which is a critical way to protect the lowest paid within our workforce. A clear commitment to HDHP plan design is key to encouraging consideration of this option. Therefore, we recommend the board adopt the following parameters applicable to non-union employees: 1. Set the County’s HDHP deductible at the minimum allowable by IRS regulations each year for the duration of the adopted 5-Year Benefits Strategy • Benefit year 2027: $1,750/$3,500 • Benefit years 2028-2030 TBD based on IRS 2. Continue to front-load employer HSA contributions in the first paycheck of each calendar year. 3. Fully fund the HDHP deductible through HSA contribution for benefit years 2027 and 2028. Human Resources will seek Letters of Agreement with labor unions to adopt a “me-too” on the above parameters if enacted for non-union employees. FINANCIAL IMPACT: These changes are anticipated to be cost-neutral or to return a savings to the County on its healthcare spend. 2100 Pontiac Lake Road | County Executive Building 41W | Waterford, MI 48328 | Fax (248) 452-9172 | OakGov.com HDHP HIGHLIGHTS • Low/No Per Pay Period Premium Contribution: Because the employee assumes more risk, contributions are zero/very low leaving more disposable income to save within the HSA or for other household needs. • Free Preventive Care: The HDHP covers in-network preventive care (such as annual physicals, routine cancer screenings, and immunizations) at 100% before you pay a single dime toward your deductible. o Paired with access to Marathon Health, even acute/sick care will have a minimal direct cost to employees, making the HDHP even more robust. NOTE: Federal regulations require HDHPs to charge a “fair market rate” and these will be set at the minimum permissible • Access to a Health Savings Account (HSA): An HSA is a "triple -tax-advantaged" savings account. You can contribute pre-tax dollars, the funds grow tax-deferred, and withdrawals are completely tax-free when used for qualified medical expenses. o Employer contributions to an HSA are immediately 100% vested and belong to the employee o HSA contributions are not “use or lose” and are intended to grow over time o HSA accounts are tied to a Visa card providing an easy point-of-services payment process with HSA funds. Without the card in hand, employees can still pay for services out of pocket and submit for reimbursement. • Employer Contributions: Many employers offer matching funds or seed money directly into employee HSAs, effectively providing “free money” for healthcare anytime, not just when employed at the County. o In the first 2 years, the County contributed $1,000 per individual/$2,000 per family to the HSA. In 2026 full funding was provided while also shifting to front-loading the full amount in January. These modifications removed risk and the primary barriers to considering the plan. • Long -Term Wealth Building: Unlike Flexible Spending Accounts (FSAs), HSA funds roll over from year to year. You can invest the money, and once you reach age 65, you can withdraw funds for any reason without penalty (though non-medical withdrawals are subject to standard income tax). Prior to age 65, HSA funds may be used without penalty for health-related expenses (medical, pharmacy, dental, optical, etc.) • Catastrophic Protection: Once you meet your annual out-of-pocket maximum, the plan pays 100% of covered services, protecting you in the event of a substantial medical event HDHP/HSA Recommendation HDHP Enrollment 2024 2025 2026 0 50 100 150 200 250 300 350 53 103 303 Number Enrolled 2024: Launched HDHP with projected participated of 50 2025: Participation nearly doubled 2026: 5-Year Benefit Plan projected enrollment of 294 (implemented $0 option, HSA improvements) NOTE: 2 largest unions have not yet adopted HDHP/HSA redesign HDHP & HSA Benchmark Data 2026 Individual Deductible Family Deductible Individual HSA ER Contribution Family HSA ER Contribution $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $1,700 $3,400 $1,700 $3,400 $2,000 $4,000 $880 $1,760 Oakland County Benchmark Recommendations A clear commitment to HDHP plan design is key to continued momentum. Set HDHP deductible at the minimum allowable by IRS for the duration of the adopted 5-Year Benefits Plan. •Benefit year 2027: $1,750/$3,500 •Benefit years 2028/2029/2030 TBD based on IRS regulations 1 Continue front- loading employer HSA contributions in the first paycheck of each calendar year. 2 Fully fund the HDHP deductible (through HSA contribution) for benefit years 2027 and 2028. 3 Questions?