Council approves renewal of city employee health plan after staff recommends keeping current options

The City Council voted to approve renewal of the city’s employee health insurance plan as part of the consent agenda at its meeting. Staff recommended keeping the current plan structure after reviewing proposed rate increases and the available budget.

City staff explained why the issue matters: the city offers two plans, a standard preferred provider organization (PPO) and a high-deductible health plan that pairs with a health savings account (HSA). Preliminary renewal estimates projected an average increase of about 6 percent; staff originally budgeted a 7.5 percent cushion. The actual PPO renewal came in at a 10 percent increase, while the HSA alternative quoted was closer to 7 percent.

Greg, staff member, said the city’s enrollment mix — relatively few employees on the PPO and most on the HSA — and current open positions meant the additional cost was absorbable within the adopted budget. “They came in at 10%,” Greg said of the PPO renewal, and added, “we’re recommending we just stay with the current plan.” City staff reported the general fund line for health insurance was budgeted at about $816,000 and the projected cost after the renewal is approximately $814,000, leaving the general fund roughly unchanged.

Under the approved approach, the city will maintain the existing PPO and HSA options and the employer contribution structure discussed by staff. Council approved the item as part of the consent agenda; there was no separate public hearing on the insurance renewal.

City officials said they will monitor utilization and plan costs going forward; staff noted that the city’s utilization rate has been above expected levels in recent years and is a driver of premium increases.

The consent agenda motion that included the health-plan approval passed by voice vote.