City awards FY26 group insurance to UnitedHealthcare; council to cover dependent costs partially

The City of Leon Valley approved a contract award for fiscal year 2026 group insurance to UnitedHealthcare after a competitive bid exercise produced rates lower than the incumbent proposal. The council approved staff’s recommendation to pay a portion of dependent coverage to reduce employee out‑of‑pocket increases.

Crystal Caldera explained that the incumbent (Blue Cross Blue Shield) quoted a steep increase that administration judged unaffordable. The competitive bid produced a UnitedHealthcare proposal with a lower base premium. Staff recommended UnitedHealthcare and asked the council to continue paying part of dependent coverage to shield employees from a sharp premium increase.

Nut graf: With the city not funding a general cost‑of‑living adjustment for all employees, staff recommended absorbing some of the premium change for dependent coverage so employees’ family policies would not see a large increase. Under the award, total budgetary impact to the city was about a 7.4 percent increase over the existing plan as presented to council.

Caldera summarized the changes: base employee medical moved from $7.83 to $8.19 (per whatever rate unit used in the staff sheet), staff recommended the city pay $8.81 for dependent coverage to reduce employee costs, dental premiums slightly decreased and basic life insurance remained about the same. Councilor Campos moved and Councilor Orozco seconded; the council approved the recommendation on voice vote.

Ending: Finance and human resources will finalize the contract with UnitedHealthcare and implement the FY26 employee benefit changes per the approved cost‑sharing; staff noted payroll and benefits adjustments will be communicated to employees.