San Luis trustees approve roughly 32% health premium increase and add dental implant coverage

SAN LUIS — The San Luis Board of Trustees on Thursday voted to approve a 31.96% increase to the city employee health-plan premiums for the 2025–26 plan year and to expand dental coverage to include dental implants as a major service.

Trustees were presented with projections by Jennifer Aragon, CVS account executive, and supporting consultants showing the city’s expected medical-plan liability rising from roughly $3.2 million to just over $4.3 million under current enrollment and utilization. Aragon told trustees that the consulting team removed roughly $370,000 in claim load from the projection after confirming with the stop-loss carrier those claimants would not create plan liability next year. She also said the stop-loss contract retains a $100,000 individual specific deductible and a $50,000 aggregating specific.

The board’s executive advisors recommended sharing part of the increased cost with employees, noting city contributions would rise to about $3.65 million and employee contributions would increase to roughly $669,694 based on currently filled positions. The recommendation included asking the City Council to allocate $3.7 million to the trust for 2025–26 to cover the city’s portion.

Why it matters: Trustees were told the increase is driven by a small number of very large claims and by market trends; without action the plan’s funding shortfall would widen. Expanding dental coverage to include implants changes the plan’s major services benefits and requires preauthorization for implant procedures, trustees were told.

Details from the presentation and discussion

- Projected increase: CVS’s analytics produced a conservative projection of about 31.9% (rounded in materials to 32%) for the overall premium. Aragon gave a low-end/expected/high-end range and said the stop-loss carrier’s administrative and margin items reduced the earlier, higher estimate.

- Financials: The board was shown a worksheet projecting the city’s expected liability for the 2025 plan year at just over $4.3 million. The executive advisors summarized that employees’ current contributions (reported as $348,677) would rise by about $252,000 to approximately $677,000, while the city’s contributions would increase by roughly $796,330 to about $3,654,382 for currently filled positions. Trustees were told those totals do not yet include future vacancies or positions not yet approved through budget processing.

- Employee-share examples: For single coverage the presentation showed a suggested employee contribution of $79.84 per month (deducted $39.92 per biweekly pay period). For employee-plus-spouse or employee-plus-children coverage the monthly employee contribution shown was $327; the materials listed incremental increases for those tiers (employee-plus-spouse/children up about $42.70 monthly; family up about $65 monthly).

- Cost drivers and risk management: Aragon said the plan’s individual stop-loss renewal reflected a 16% increase and the aggregate stop-loss a 3.5% increase; she identified one claimant with roughly $700,000 in charges as a primary cost driver. She also noted the plan had taken advantage of a “premier” program with the stop-loss carrier that removed a stop-loss administrative fee.

- Dental changes: Trustees voted to expand the dental plan to cover implants under major services at 50% after a $25 deductible, subject to the plan’s $2,250 annual maximum per covered individual and required preauthorization. Aragon said implants would follow the same deductible and coinsurance structure as other major dental services.

Trustee and staff remarks

HR/finance staff member Adela Encinas told trustees, "The city will end up paying 85% of the total premium and employees will pay 15%." Vice Chair Emma Torres and other trustees discussed how the proposed employee share compares with neighboring employers and noted the employee portion had not increased in about eight years; trustees also asked staff to revisit plan tiers and deductibles in future negotiations.

Actions and next steps

The board approved the premium increase motion and recommended the City Council allocate $3.7 million to the trust for plan year 2025–26. Trustees also approved expanding dental coverage to include implants as a major service; both motions passed with trustees voting in favor. Staff and the consultants will proceed with open-enrollment planning and a May strategic planning session with HR was scheduled to review vendor performance and benefit design options.

Votes at a glance

- Consent agenda (minutes of a special meeting held 01/15/2025): approved (motion passed; vote recorded as in favor). - Motion to approve a 31.96% premium increase and recommend City Council allocate $3,700,000 to the trust for 2025–26: moved and seconded; motion passed. - Motion to expand dental coverage to include dental implants as major dental services (50% after deductible, $2,250 annual max, preauthorization required): moved and seconded; motion passed.

The board adjourned following the votes. Staff said the trust will present final contribution tables and enrollment materials to employees during open enrollment and may return to the board if vacancies or budget changes require additional action.