HR Manager Patricia announces CalPERS health plan rate increases for 2026

During the recent Finance Committee meeting held on August 12, 2025, in Salinas, significant discussions centered around the rising costs of health care and the implications for city employees. Patricia, an HR manager, presented the annual updates on CalPERS health insurance rates, highlighting notable increases for the upcoming year.

The most substantial rise was observed in the platinum PPO health plan, which will see a 13.15% increase, while the Blue Shield access plan will increase by 11.26%. These hikes are attributed to ongoing increases in health care costs across the board. Currently, the city covers up to 90% of the platinum plan for most employee units, but changes are anticipated, particularly for public safety units, as negotiations are still underway.

A significant change announced by CalPERS is the elimination of the Blue Shield Trio HMO plan in Monterey County, which will be replaced by the Blue Shield Access Plus HMO plan. This transition will affect approximately 76 employees, who will have the option to remain in the new plan or choose another during the open enrollment period. The shift aims to enhance sustainability and prevent steep premium increases for members.

Additionally, CalPERS has entered into a new five-year contract with CVS Caremark as its pharmacy benefits manager, replacing OptumRx. This change is expected to control drug costs and improve health outcomes for members, with minimal disruption anticipated for most.

The meeting also addressed the city's projected health care costs, which have risen by approximately $2 million over the past three years. For the fiscal year 2025-2026, anticipated health costs are estimated at $14.9 million, with employee contributions expected to reach $789,000.

As the city navigates these changes, the Finance Committee emphasized the importance of managing health care costs while ensuring that employees have access to necessary health services. The discussions reflect ongoing efforts to balance fiscal responsibility with the health needs of the community.