Yvonne Alfonso Windsor, chief financial officer for Montgomery County Public Schools, told the Fiscal Management Committee on Sept. 17 that the district expects negotiated changes to health-plan arrangements and pharmacy contracts to improve the solvency of the employee benefits fund beginning in fiscal 2026. She said employees will take on an additional 1 percentage-point cost share starting in January, which the district projects will raise approximately $2.9 million in FY26. "We negotiated last year that the employees are gonna pay 1% more," she said.

CFO’s projections and negotiated savings: Alfonso Windsor said MCPS negotiated with pharmacy vendors and its insurer to reduce prescription costs and administrative fees. She identified PrudentRx as projecting roughly $5.8 million in annual prescription savings, and said the vendor Caremark’s market analysis identified $5–$7 million in reductions across FY26–FY28. The district also negotiated a limitation on GLP‑1 obesity drugs to lower future spending; the CFO said GLP‑1 prescription spending rose from about $24 million in FY23, to $58 million in FY24, and nearly $80 million in FY25. She estimated a $2.5 million reduction in FY26 tied to the new GLP‑1 coverage limits, with larger projected savings in later years. In addition, she said Cigna will provide a six‑month administrative fee holiday in FY26 worth about $3.4 million and smaller fee holidays in subsequent years.

Why it matters: Alfonso Windsor framed these measures as part of a multi‑year plan to bring the benefits fund to solvency. She told the committee that some category 12 line items — active employee group insurance, retiree insurance, FICA, retirement contributions and self‑insurance — ended FY25 with mixed variances: some components ran deficits while others produced surpluses. She explained one reason for an apparent surplus in grant-funded category 12 is "revenue failure": federal awards finalized smaller than initial projected amounts, producing lower grant spending than budgeted.

Details presented: The CFO reported the FY25 budget versus actuals for category 12 and pointed to the notable increases in prescription spending over recent years. She said the FY26 projection incorporates employee cost-sharing increases, prescription-management savings and contractual fee holidays, which together the district projects could reduce benefit-related expenditures by roughly $20 million per year across FY26–FY28 if projections hold.

Committee follow-up: Board members asked for the memo with final FY25 numbers and asked staff to keep providing transparent variance explanations. "I appreciate the extra transparency of that," said a committee member, and another said the union and county partnerships that produced the savings were appreciated. Alfonso Windsor said the board will receive a detailed memo with final numbers and explanations of how the district closed out FY25 in category 12.