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Council hears staff recommendation to renew employee medical coverage with Blue Cross Blue Shield after RFP
Summary
HR and consultant McGriff presented results of a competitive RFP for employee benefits; staff recommended Blue Cross Blue Shield for medical coverage after competing bids produced a best-and-final 0% renewal rate from BCBS.
Glenn Heights city staff and benefits consultant McGriff briefed the City Council on Monday on recommended changes to the city—s employee benefit plans for fiscal year 2025-26.
Shane Freeman of the city—s human-resources staff introduced Lance Penley, senior vice president of employee benefits at McGriff, who described the RFP process and the competitive results. Penley said the city went to market after projecting a 6% renewal and that Blue Cross Blue Shield initially offered an 18% renewal but, after competing bids and a best-and-final process, returned a final proposal that effectively reduced its renewal to 0% for the coming year. "We got them to 0%," Penley said.
City staff presented proposed plan costs and carrier recommendations. The presentation included two medical-cost scenarios: UnitedHealthcare quoted roughly $1,023,783.72 and Blue Cross Blue Shield quoted roughly $1,048,582.32 (figures presented by staff). Staff cautioned that UnitedHealthcare—s lower initial quote represented an "immature premium" that may true up in the second year and could lead to 10% to 15% higher costs in year two.
Staff recommended Blue Cross Blue Shield of Texas for medical coverage and MetLife for vision and some ancillary coverages; other ancillary lines (dental, disability, critical-illness, accident) were presented with quoted costs from multiple vendors (MetLife, Mutual of Omaha, Reliance). Staff noted that flexible spending accounts are voluntary payroll-deduction benefits and not currently budgeted by the city.
Councilmembers asked about how staff leveraged the RFP process, whether employee input had been solicited, and specific plan features such as health savings account (HSA) contributions. Freeman and Penley said department heads and the city manager were consulted during the selection and that the city provides an HSA contribution (staff said it is about $500 per participating employee).
No formal council vote was recorded on the recommendation during the meeting; staff noted that renewals align with an October 1 effective date and that the RFP results and recommended carriers will be used to finalize plan renewals prior to that date.
Presenters: Shane Freeman, human-resources; Lance Penley, McGriff; reporting: Mayor Sonya A. Brown and council members who asked follow-up questions.
