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Belmont faces double‑digit insurer renewals; staff weighs self‑funding after 39–50% quotes
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Summary
City staff reported insurer renewals with UnitedHealthcare at 39.3% and Blue Cross Blue Shield at about 50%—exceeding the 25% increase assumed in the draft budget. Council discussed moving to a self‑funded plan through HUB International/Pareto; staff said year‑one costs could require an unassigned fund‑balance set‑aside of amounts mentioned in the presentation.
City staff alerted council to unexpectedly large health‑insurance renewal quotes that exceed assumptions built into the draft FY 2026–27 budget. Miles told council the city had budgeted a 25% increase but recently received formal bids that were materially higher: UnitedHealthcare quoted a 39.3% increase and Blue Cross Blue Shield quoted roughly 50%. Staff said HUB International is working on Pareto self‑funding quotes and that the city is evaluating whether self‑funding would provide greater stability and lower costs over multiple years despite a potentially higher short‑term cost.
Jared said early modeling shows that converting to self‑funding would likely require an upfront unassigned fund‑balance set‑aside to meet initial reserve expectations; staff cited example set‑asides in the transcript (references included $360,000, $150,000 for water/sewer, and $5,000 for stormwater) while emphasizing those numbers are part of internal planning and subject to final quotes and actuarial review. Staff and council discussed options for sharing costs with employees via tiered contributions versus the city absorbing more of the increase to limit employee impacts.
Council directed staff to obtain final HUB/Pareto numbers and to model tiered employee contributions and other mitigation strategies for the May meeting so membership and budget impacts can be determined before final adoption.
