Commission renews employee health and dental program with Jefferson Health Plan, custom design benefits
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Summary
The board authorized the city manager to contract with Custom Design Benefits as third-party administrator and to continue participation in Jefferson Health Plan for employee health coverage, directing staff to phase modest employee cost-sharing changes and pursue cost-saving pharmacy and dental plan measures.
The Board of Commissioners voted to authorize the city manager to enter an agreement with Custom Design Benefits to serve as the city’s third-party administrator and to continue the city’s partnership with the Jefferson Health Plan for employee health coverage. The board also approved plan design recommendations and administrative steps to implement state insurance mandates and evaluate pharmacy sourcing options.
City consultants and staff summarized the recommendations and the plan-year outlook. Lisa Stamm, staff attorney with consultant Cheryl Morgan’s group, told the board the Jefferson Health Plan produced a 7% trend renewal this year — within current national trends — and that the city’s plan design will continue to use four existing plan options. Staff recommended phasing a suggested employee cost share change across two years to reduce the short-term impact: a 15% employee share increase this year and an additional increase in the following year, rather than a single-step 20% change.
Why it matters: Staff said the city historically subsidized a large portion of employee premium cost and that recent increases made a phasing approach preferable to sudden, large employee contributions. The board and staff emphasized employee retention and the need to balance benefit value with fiscal responsibility.
Key elements discussed: - Third-party administration: Renew with Custom Design Benefits as third-party administrator and partner for dental self-funding. - Large-pool partnership: Continue participation in the Jefferson Health Plan (a pool of public employers) to smooth claims and reduce volatility. - Pharmacy sourcing: Staff and consultants recommended pursuing voluntary international personal-importation options for brand drugs (e.g., Canada) when available through the pharmacy benefit manager; the board was told this can lower brand-drug costs substantially for the plan and members. - Dental plan: Move to a self-funded dental option through Custom Design Benefits because participation in the Delta Dental network had eroded locally; industry tables would be used to set usual-and-customary reimbursement levels (staff suggested 90% of local usual-and-customary rates to limit balance billing). - Wellness and FSA changes: Adopt 2026 IRS maximums for flexible spending accounts and retain a $250 wellness FSA contribution tied to annual physicals.
Board questions covered premium comparisons with similar governments, enrollment timing (open enrollment in November), communications and education for employees, and mechanisms to moderate future increases. The board discussed the city’s budgeting decisions and a plan to shop broker services as part of fiduciary diligence.
Vote and next steps: The roll-call vote authorized the city manager to enter the contract with Custom Design Benefits and to implement the recommended plan changes. Staff said they will continue conversations with unions and employees, finalize implementation details and verify availability/timing for international pharmacy sourcing.
