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City to renew Aetna health plans; employees to pay $5/week; Mutual of Omaha recommended for ancillary coverage
Summary
City staff recommended renewing medical benefits with Aetna and the City Commission directed staff to adopt a modest employee payroll contribution of $5 per week while moving ancillary coverage to Mutual of Omaha and exploring hospital indemnity options.
City staff and the city’s benefits broker presented options for employee health coverage renewal for fiscal year 2025–26 and the City Commission directed staff to renew with Aetna while adopting a modest employee premium participation.
Interim Human Resources Director Jacob Newman and benefits consultant Eric Brewer said Aetna offered a competitive renewal after analysis of claims history and market data. Staff presented three plan‑design options and a hybrid option: (a) renew with no design or contribution changes; (b) change plan design to increase member cost‑sharing; (c) pair design changes with a $5 per week employee contribution; and (d) an unlisted but discussed option to keep plan design and apply a $5 per week contribution across the board. Staff reported option C would reduce the city’s budget impact the most; option D was discussed as a modest across‑the‑board payroll contribution without changing copays.
Commissioners agreed the city should continue Aetna for medical coverage, authorize an employee payroll deduction of $5 per week per tier (staff characterized that as approximately $44 annually per pay period arrangement), and asked staff to return a refined implementation plan showing wellness incentives that would offset employee cost and encourage preventive care. The commission also directed staff to move voluntary/ancillary coverages from Guardian to Mutual of Omaha to realize estimated employer premium savings, and asked staff to evaluate American Fidelity hospital/indemnity products and on‑site clinic options as longer‑term cost control strategies. Staff said Mutual of Omaha would reduce employer cost by roughly $23,000 and that the Wellness program with Aetna ($70,000 in annual support) would continue.
The commission asked HR to return with final contract terms, a clear employee communications plan for open enrollment and wellness incentives, and to examine self‑insurance and on‑site clinic feasibility for future years. No formal vote on a contract was required at the presentation; staff will finalize and present contract documents and final contribution structure to the commission.
