Woodland Hills approves switch to PEHP high‑deductible plan with $3,000 employer contribution

The Woodland Hills City Council voted to change its employee health insurance carrier and plan design, approving a PEHP high‑deductible option paired with an employer contribution intended to be deposited to employees' health accounts.

Finance committee members and city officials spent more than an hour reviewing competing proposals before recommending PEHP. Aaron, a finance committee member, summarized market offers and the committee's analysis: “we recommend moving to a high deductible health plan paired with a health savings account,” he said, noting the plan would reduce the city’s exposure to renewal increases while providing employees with funds in an HSA to cover deductibles and invest for the future.

Why it matters: the council learned the city currently pays 100% of premiums for three employees and faced a SelectHealth renewal increase of about 12.7 percent. The committee presented PEHP plans that would cut the city's cost relative to the anticipated renewal and allow the city to contribute money directly to employees' tax‑advantaged health accounts. Mike Taylor, chairman of the finance committee, said the recommended option would save the city roughly 15 percent versus the insurer’s renewal and about 4 percent compared with current spending.

Key details: Under the approved package the city will fund $3,000 per employee annually. The contribution may be structured to fund either the employee’s HSA (Health Savings Account) or an employer‑controlled HRA (Health Reimbursement Arrangement) at the city’s discretion, allowing flexibility to address employees’ cash‑flow concerns at the start of the plan year. Aaron explained tradeoffs between the traditional and high‑deductible designs: the high‑deductible option increases routine‑visit exposure but pairs that with an HSA; it also lowers the family out‑of‑pocket maximum substantially (for example, a presented comparison reduced a family catastrophic exposure from about $17,000 to $6,600 in one scenario).

Committee and employee input: Tim Larson and other committee members solicited quotes directly from PEHP and modeled several HSA funding scenarios. Staff and employees flagged two practical concerns: the cash‑flow hit at the start of the year if employees must self‑fund HSA contributions, and network access for employees who live outside central Utah. Council members discussed options to address early‑year cash flow through an HRA or by allowing employees to adjust per‑paycheck HSA withholding. One employee speaker recommended an HRA to provide immediate funds while employees build HSA balances.

Network choice: PEHP offers multiple provider networks. The council approved the Summit network as the baseline (the city will pay the Summit network premium; employees may upgrade to the more expensive Advantage network if they wish by paying the difference). Aaron told the council the Summit network was cheaper and adequate for most employees, while the Advantage network is useful for employees who travel or live where Intermountain facilities are the only local option.

Dental and vision: committee members explored adding employer‑paid dental and vision but agreed to defer a final decision. Aaron said dental premiums are small relative to medical premiums and could be folded into the package if council wished, but some council members favored using savings to boost HSA funding rather than immediately paying dental premiums.

Vote and next steps: Council member Lund moved to appropriate funding and implement the PEHP Option 5 Summit network package with the $3,000 employer contribution available to employees either as HSA or HRA funding; Council member Hilliard seconded. The motion carried unanimously. Staff were instructed to notify vendors and to finalize administration details — specifically whether the employer component will be delivered initially as an HRA or HSA and whether dental/vision will be added — before open enrollment.