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Council approves 2026 cafeteria plan renewal as staff seeks side‑letter talks with unions over medical premium spike
Summary
The council approved the 2026 cafeteria plan renewal to preserve employee and retiree benefits coverage despite a roughly 14.6% increase in medical premiums; staff will pursue short‑term options and discuss side‑letter negotiations with unions to mitigate employee impacts.
The Merced City Council on Sept. 15 approved the 2026 renewal of the city’s cafeteria benefits plan — covering medical, dental, vision and other welfare benefits — while acknowledging a near‑15% jump in medical premiums that will increase costs for both the city and employees.
Human Resources staff reported the medical portion of the plan rose about 14.6% this year. Union representatives and city employees told council the increase creates hardship for many workers living on slim margins. Jason Salters, president of the Merced Association of City Employees (MACE) and a 23‑year public‑works employee, said the rise will hit many colleagues hard and urged management to seek remedies: "A lot of us run really thin margins… We could really use some awareness that we're the unseen ones that make this city function," he said.
City management said that approving the plan preserves open enrollment and coverage and that staff will explore a short‑term side‑letter with unions and other mitigation options. The council directed staff to engage with AFSCME and MACE and to report back; staff also emphasized they would continue evaluating provider options during the coming year. The motion to approve the cafeteria plan passed unanimously.
Council members expressed strong support for public‑works employees and asked staff to prioritize negotiations to reduce employee premium burdens ahead of upcoming contract bargaining.
