Council pauses consideration of voluntary Champion Health supplemental plan after legal concerns

Council member Harris introduced R25177, a resolution to waive competitive bids and authorize the city to participate in a voluntary supplemental health-care plan with Champion Health. The proposal prompted a multi-hour discussion at the council meeting about the planand how it would be implemented for city employees. Champion Health representative Camille LaGrosse described enrollment mechanics and said the plan is designed to be "pretax" under an IRS Section 125 arrangement and that the vendor had offered to obtain an IRS opinion letter to address tax treatment.

The substance of the debate centered on four issues: whether the plan's benefit structure qualifies for pretax treatment under the Internal Revenue Code (Section 125); whether the plan's mechanics…