STAFFORD COUNTY, Va – Stafford County Public Schools will draw on its health benefits reserves to cover a sharp increase in employee healthcare costs.
The Board of Supervisors on Sept. 16 unanimously approved the school division’s request to use $1.5 million from its health benefits fund after claims rose 25% in the past year, far above normal levels.
School finance officials said the reserve, once nearly $20 million five years ago, has been repeatedly tapped in recent years and could shrink to just $1.4 million if current claims trends continue.
“This reserve was built for a reason, and we’ve had to rely on it heavily the last two years,” said Chris Fulmer, who oversees school division finances. “We’re working to stabilize the fund moving forward, but claims have spiked far beyond what we’ve seen before.”
Covering the Shortfall
To balance the account, schools have:
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Increased employee health premiums 5% to 7.5%, bringing in about $700,000.
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Budgeted $4 million more in the FY26 operating budget for the health fund.
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Used $2.1 million from the system’s retiree health benefits trust (OPEB fund).
Officials said they may have to draw from the OPEB fund again if claims remain high.
Board Concerns
Supervisors approved the transfer but raised questions about long-term sustainability.
Supervisor Meg Bohmke pressed Fulmer on how the schools plan to replenish reserves. “I don’t remember you all using your OPEB trust fund before,” Bohmke said. “That’s really for future claims. Is this just because your claims are so high you have no choice?”
Fulmer responded that the trust can be used for retiree health benefits now and that schools are budgeting additional contributions to stabilize the fund.
For employees, the higher premiums mean more out-of-pocket costs. For the division, the shrinking reserve leaves less cushion if claims continue rising. And using OPEB funds could reduce resources for future retirees.
