MORGANTOWN – The city of Morgantown has more questions than answers when it comes to the future of its self-funded employee insurance plan.
Will the recent trend of rising costs see an overdue correction and cycle downward?
Can the city afford to wait and hope for the best?
And, ultimately, what if the historically cyclical nature of costs associated with the in-house plan are no longer reflective of the market and the numbers just keep climbing?
“I think for me it’s part of doing our due diligence to consider other options,” City Manager Jamie Miller said during a recent Morgantown City Council workshop with Finance Director Jon Furgison.
“We are on maybe a three to five year high, and as a self-funded plan, you kind of see the data and you see the trends. Normal trends would say we would be heading into a dip. We’re not seeing that yet, so we have to make those plan design decisions,” Miller continued.
In January 2025, Morgantown City Council approved moving just over $3.3 million out of its Financial Stabilization Fund – about 59% of the available total – in order to maintain employee insurance benefits.
Furgison told members of council that the city is continuing to see wild fluctuations in insurance payouts month to month.
“What I want you to visually look at, you can see a trend over a five-year period. Has this become less volatile? Has this become a smaller number? The answer is no,” he said.
For the last six months, the city has worked with Express Scripts through its Advanced Utilization Management Program to get a handle on prescription costs. While the program comes at a cost to the city, Furgison said the company claimed it would likely result in an annual savings of $700,000 to $900,000 by working with providers to influence what prescriptions are being written, and when.
“Have we seen it yet? I have not,” he said of the savings. “Does that mean that we haven’t realized it, and they have stopped the increase from going much higher? That is a strong possibility, but from the data that we currently have, we cannot see that.”
Mayor Danielle Trumble, who sits on the city’s insurance working group, said the program has also introduced a level of complication for plan members.
“We were pretty adamant that we did not want employees and participants in the plan to have to jump through all these extra hoops if they were not sure that this was going to get us the savings, and it frustrates me to hear that maybe we’re not seeing that, because we have made things more difficult on our members, which we did not want to do,” Trumble said. “So, it’s not just, ‘Did we see the savings or should we cancel the program.’ Things have gotten more complicated.”
Councilor Mark Downs asked why the city continues to press forward with a self-funded model instead of exploring other options like commercial plans.
“Is that an option for us? Yes. Is that a more expensive option? Well, they’re gonna do exactly what insurance companies do. They’re gonna take a look at our claims history. They’re gonna go back either three or five years, and they’re gonna see, well, they’ve escalated significantly over the past two and a half years. They’re gonna calculate that into their premium calculation, plus they’re gonna build in a buffer for the amount of risk they are absorbing, and the industry average is a 40% margin is what they would build in,” Furgison responded.
Even so, Downs said he would like to see the city keep all options on the table.
Furgison cautioned that there are a lot of factors that need to be weighed when considering changes to the insurance plan. One is cost. Another is employee satisfaction.
“We have to do that due diligence, but it’s kind of like the timing of any market decision. Do you get out of it right at the wrong time? And so, I think that we’ll have to get all of that data and consider that,” Miller concluded. “How much longer do we wait?”
Based on budget information, a 17.1% increase in employer contributions was calculated into the city’s upcoming 2027 fiscal year budget.
