Staff recommends renewing Blue Cross plan after carrier quotes show steep premium and deductible increases

City staff told the New Prague City Council that the city’s preferred option for 2026 employee health coverage is to renew the existing Blue Cross plan, despite projected premium increases of roughly 16.9 and an IRS-required $100 rise in the single-coverage deductible.

Joshua (city staff) summarized three options from the carrier: a straight renewal that increases the deductible by $100 (to $3,400 for single coverage) and raises premiums ~16.9%; an alternate plan with the same deductible but a higher out-of-pocket maximum (quoted at a 7.7% premium increase but greater employee cost exposure); and a second alternate with a still-higher deductible/out-of-pocket and a 9.5% premium increase. Joshua said the alternate plans would modestly reduce monthly premiums for employees but substantially increase their maximum potential out-of-pocket exposure, so the net benefit to employees would be small. "You may save $10 a month in premium but then spend another $2,000 in the year if you end up using it," Joshua said.

Staff presented the budget impact analysis under the city’s current employer/employee split (80/20 for premiums). If the city renews the current plan, staff said the projected increase is already accounted for in the adopted 2026 preliminary budget assumptions; if the council moved to an alternate with higher out-of-pocket exposure the distribution of the cost increase would shift more to employees. The staff recommended renewing the current Blue Cross renewal to minimize overall cost increases for employees and the city while meeting the carrier’s deadline for plan direction at the next budget meeting.

Council members asked for a final decision at the Monday budget meeting so staff can give the carrier timely direction; staff confirmed the city will return with final premium numbers and any recommended employee communications.