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Seaford council approves Pan American health plan with 8.6% projected rise
Summary
The City Council voted to accept Pan Americans Option 2B for the 2025-26 employee health plan after a presentation from benefits consultant Integra; city staff said employee premiums will rise modestly and some benefit design changes are recommended to reduce member out-of-pocket costs.
Seaford City Council on May 13 approved a renewal of the city's employee health insurance plan, accepting Pan American's Option 2B after a presentation by benefits consultant Chris Smith of Integra Administrative Group.
The council acted after Smith recommended the carrier and plan option, saying, "The recommendation for the 2025-2026 benefit plan year is to accept the Pan American proposal option 2b with a projected increase of 8.6% and a projected maximum increase of 5%." The council approved the recommendation by voice vote.
The change matters because it sets the city's medical, prescription, dental, vision and life-insurance contracts for the coming plan year and includes design changes intended to limit members' out-of-pocket costs. City staff said a finance memo included in the council packet lays out how the change will affect employee payroll contributions: single coverage will rise by $1.45 per week; employee-child coverage by $7.79 per week; and employee-spouse and family coverage by $12.13 per week. Those numbers were presented to council as the city's estimate of the weekly impact to employee paychecks.
Smith told the council that Integra solicited quotes from 10 carriers and received four responses; Integra and its partners recommended Pan American based on cost, benefits and comparisons with other municipalities. He also described recommended plan design changes to reduce member costs, including switching the pharmacy benefit manager to Prime Therapeutics, increasing the annual vision hardware benefit to $500, and adding a maximum member cost of $100 per brand prescription. Smith also outlined additional member services available under the recommendation, including telemedicine and low-cost generic prescription programs.
Staff also reported retiree coverage renewals handled separately: the Hartford Group Insurance Trust maintained retiree medical coverage with a 0% renewal effective Jan. 1, 2025, while retiree dental and vision rates will rise (city staff reported a retiree dental rate of $43.71 and a vision rate of $18.99 per retiree).
Human-resources staff told council they had continued required labor discussions with the Teamsters union representing police employees; the Teamsters had no comments on the renewal during that review, staff said.
The motion to accept the recommendation was made by Councilman Orlando Holland and seconded by Councilman Alan Quillen. The council recorded the decision as approved by voice vote.
City staff said the projected premium increases will be included in the upcoming budget process and that the recommendation balances higher medical cost trends with benefit changes aimed at reducing members' direct costs for prescriptions and vision hardware.
Plans and timelines for implementing Prime Therapeutics as the PBM, the vision change and the prescription cap were described by staff as part of the renewal transition; staff said the proposals are expected to be effective for the 2025-26 plan year.
