Aldermen select employee medical insurance broker services provider

The Conway City Council at a special meeting Monday selected JTS Financial to provide medical insurance broker services for city employees. The selection followed presentations from three companies and discussions about rising insurance costs and future funding options.

The city currently uses Blue Cross Blue Shield of Arkansas (BCBS) for fully insured medical coverage, with the renewal date set for Jan. 1, 2027.

Alderman Andy Hawkins said the city paid approximately $7 million in premiums over the previous 12 months, while the insurance carrier paid out $9 million in claims.

"That we paid in approximately $7 million in premiums last 12 months as of a couple months ago and the carrier had paid out $9 million … because of every $1 million that we go over, $8.5 million is what we had on the table. Early this year, that [was] a 3 percent raise that could go to the employee," Hawkins said.

The city received nine proposals for broker services, four of which met the minimum qualifications in the request for proposals. Three companies presented their services to the council: Brown & Brown Insurance, JTS Financial and Oakbridge Insurance.

Brown & Brown Insurance, represented by lead consultant Todd Setser, proposed helping the city negotiate its insurance renewal, review claims and provide human resources support. The company presented fully insured, level-funded and self-funded options and said the city could consider other carriers if negotiations with BCBS did not produce favorable rates.

JTS Financial's representatives, Charles Angel and Nancee Roberson, proposed assigning a dedicated team to Conway and providing human resources support, claims reviews and a customized benefits platform. The company presented fully insured, self-funded and group captive options.

"Some of the technology and the assistance that we're able to give human resources … there's several value added things that we have that we feel like really saves a soft cost for the city," Angel said.

Hawkins asked about pharmacy benefit managers and ways to reduce prescription drug costs. Angel said the company could explore manufacturer assistance, foundation assistance and federally discounted drug pricing for specialty medications.

"About 1 percent of the population is on a specialty med … but in that 1 percent of folks that are on specialty meds, that usually makes up about 50 percent of our pharmacy spend in a group," Angel said.

Tracy Davis and Shane Martin presented for Oakbridge Insurance, proposing assigning six people directly to Conway, supported by three specialists. The company presented a three-year plan to review the city's insurance in 2026, move toward self-funding in 2027 and reevaluate the plan in 2028.

Davis said Oakbridge's compensation would be built into payments from the insurance carrier. When Alderman Shelia Isby asked about the arrangement, Davis said the city could also pay the broker directly.

Alderman Hawkins asked the companies if they could obtain diagnosis and prognosis information that the council had been unable to receive from BCBS. Two of the three companies said they could obtain the information.

The discussion followed a Sept. 3 council vote approving broker services 5-1, with Alderman Mark Ledbetter voting against it. Mayor Bart Castleberry said the city initially considered hiring a broker after anticipating a possible 30 percent increase in insurance costs.

"Our goal today was to hire a broker so that they can negotiate those prices with our current insurer and bring that number down with the knowledge that in 2027, the city's goal is to be self-insured," Castleberry said.

Isby said she did not believe the broker's work should be limited to BCBS because brokers could seek information from other insurance carriers.

City Human Resources Manager Cody Arnold said a committee to consider the companies ahead of the council vote had ultimately chosen JTS.

"We had ultimately decided [on] JTS. They weren't the cheapest but they weren't the most expensive, but they brought the most to the table as far as what they could offer HR and what they could offer our employees," Arnold said.

The council voted 5-0 to select JTS Financial for the broker services.

Aldermen Drew Spurgers, David Grimes and Spencer Hawks were absent from Monday's meeting. The next city council meeting is set for 6 p.m. Oct. 27 at City Hall, 1111 Main St. All city council meetings are open to the public and stream live on the city's YouTube and Facebook pages.

Distributed by Newsbank, inc.