Leon Valley awards FY26 employee health plan to UnitedHealthcare; city will subsidize dependent premiums

The City of Leon Valley Council approved Aug. 19 a recommendation to award the fiscal year 2026 employee group insurance contract to UnitedHealthcare.

City staff and broker analysis showed a Blue Cross Blue Shield renewal would have raised the city’s base medical rate substantially (to a 19.5% increase). After soliciting bids, UnitedHealthcare offered a plan that reduced out‑of‑pocket copays and produced a lower premium increase than the Blue Cross renewal. Under the approved package, the city will adopt UnitedHealthcare rates with a base employee contribution set at $8.19 (new base rate) and the city agreeing to contribute $8.81 toward dependent coverage. Dental premiums decreased slightly to $25.72 and basic life insurance remains at $1.30. City staff presented the change as a net 7.4% increase in group insurance costs overall — lower than the renewal estimate from the incumbent.

Human Resources noted the change would limit the impact of higher premiums on employees: the city’s contribution to dependent coverage and the lower copays were designed to reduce employees’ out‑of‑pocket exposure. Councilor Campos moved to approve the contract award and Councilor Orozco seconded; the motion carried.

Why it matters: Health insurance is a major employee benefit and a material item in the FY2026 personnel and operating budgets. The contract award preserves continuity of coverage while seeking to limit premium increases for staff.

Details: Staff recommended UnitedHealthcare after soliciting competitive bids and reviewing plan designs. The council approved the award and required staff to implement the new plan for FY2026 as presented.