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Council approves 2026 employee benefits package, new administrator and Paylocity contract
Summary
Waterloo council approved a set of 2026 employee benefits contracts — selecting UnitedHealthcare for health coverage and renewing dental, vision and life plans — authorized a TPA change and approved a new Paylocity contract; officials said the committee vetted competitive bids and projected modest savings on administrative services.
The Waterloo council approved a package of employee benefit contracts and related administrative changes Tuesday, including selection of UnitedHealthcare for group health coverage and authorization to move benefits administration to Paylocity.
Council members voted to adopt group health coverage under UnitedHealthcare effective Jan. 1, 2026, through Dec. 31, 2026, with a 6% rate increase on the plan presented to the council. Committee-member (S3), who summarized the insurance committee's review, said Blue Cross Blue Shield initially proposed roughly a 20% increase (later reduced in negotiations) while UnitedHealthcare came in at about 13% over the city's current cost. "Blue Cross Blue Shield came back at 20%, so they knocked 5% off, but we went [and] it was also bid through UnitedHealthcare, and they came back at 13% over what we are currently at," S3 said.
Council also approved group dental coverage with Delta Dental and group vision coverage with EyeMed for the same one-year period, each at no rate increase from current pricing, and approved renewal of group life insurance through Dearborn Life Insurance Company (via Blue Cross Blue Shield of Illinois) with a 38-cent per-employee increase.
The council authorized removing the current third-party administrator (TPA) relationship with Velocity for 2026, a move the meeting record estimated would save approximately $3,626.45, and approved contracting with Paylocity to replace prior vendors WEX and CVIS for payroll/benefits administration. A staff member (S1) clarified that Paylocity is a new contract rather than a renewal: "So it's not a renewal. We're signing a new contract with Paylocity. Our previous contract was with WEX and CVIS," S1 said.
Council members said the insurance committee met several times to evaluate bid responses and discuss employee-union feedback; S3 said staff had engaged with union representatives and that the committee recommended moving forward. The council recorded approval of the committee's recommendations by roll call.
Next steps: staff will finalize vendor contracts and complete implementation tasks before the Jan. 1, 2026, effective dates.
