Derby's Health Insurance Cost Adjustments for 2027

Derby faces rising health insurance costs, prompting adjustments to its 2027 plans, marking the most significant increase since becoming self-funded in 2012.

At a recent City Council meeting, Jenny Turner, Derby's Human Resources Director, announced necessary changes to cope with escalating health insurance expenses. The city's insurance claims exceeded expectations by 14% for the first three quarters of 2026, driven by the cost of specialty medications and hospital expenses. Consequently, the Derby Council approved adjustments to their plan for 2027 to handle these rising costs.

Tackling Escalating Costs Through Adjustments

As part of the new measures, USI, the city’s insurance broker, recommended increasing certain copay amounts. For example, copays for advanced imaging procedures will rise by $100, emergency room visits by $200, in-patient and out-patient surgeries by $650, and surgical facility use by $350. Additionally, a 13.5% increase in total premiums was recommended, alongside a more competitive premium cost-sharing structure. The changes will result in a funding distribution where 88% is employer-funded and 12% is employee-funded.

Despite these increases, Turner pointed out that the adjustments still shield Derby from fully reflecting the national trend of rising costs. As a self-insured entity, Derby does not include deductibles in its health plan, helping maintain control over expenditures.

Comparison Within the Region

Derby continues to offer some of the lowest health insurance premiums in its metropolitan area, closely trailing only Hutchinson. Citing the Kaiser Family Foundation’s report, Derby’s family coverage premiums remain over $2,000 lower than the national average.

Long-Term Perspective

This year’s adjustment represents the largest since Derby adopted a self-funded insurance model in 2012. However, the average annual increase over 15 years has been just 5.23%. With a budget allocation of $3.27 million for employee and retiree health coverage in 2027, Derby aims to anticipate total expenses of $3.18 million while accommodating up to $3.7 million if necessary.

Strategic Shifts and Additional Measures

In addition to the health insurance changes, Derby is strategically shifting its pharmacy benefits. By continuing to partner with Oread and integrating the SHARx program, the city plans to reduce costs associated with specialty medications not covered under the standard plan. Meanwhile, the dental insurance plan with Delta Dental will remain unchanged, providing stability for policyholders.

"Having this consistency for the last 14 years has been phenomenal."