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Council reviews proposal to move employees and retirees into bronze plan funded by 'H' cards
Summary
Finance staff proposed shifting active employees and retirees under-65 from legacy blue plans to a bronze/high-deductible plan supplemented by pre-funded 'H' cards to cover deductibles and co-pays; staff said the change could save the city money while holding participants 'harmless.'
Finance staff presented a proposed overhaul of the city’s health insurance structure, saying the carrier’s classic 'blue' plan is being phased out and costs have risen. To reduce consortium costs and limit exposure, staff proposed moving employees and retirees (under-65) to a bronze/high-deductible plan and issuing fully funded 'H' cards to cover yearly deductibles and out-of-pocket costs.
Why it matters: staff said the move could cut the city’s contribution significantly while maintaining or improving actual out-of-pocket costs for many employees. The finance presentation included concrete cost comparisons: an example monthly employer cost shown for the classic blue individual plan (~$1,641) versus bronze plan alternatives (~$546–$583), and a modeled additional city cost to step up to a higher-level 'plan four' (~$72,000 annually, described as roughly equivalent to a 1% tax levy if funded citywide).
Staff explained the H-card mechanics: each covered person would receive a pre-funded card (staff used $7,000 as an example of a maximum annual H-card amount) to pay deductibles and co-pays; any unused H-card funds at year-end would revert to the city, reducing net plan expense. “If you go to my dermatologist ... instead of $25 off my Visa, it’d be 25 off my H,” a presenter explained while walking council through how HC cards would lower out-of-pocket costs.
Retiree outreach: staff noted prior voluntary moves by retirees to alternative supplemental plans had positive feedback and proposed educational sessions (day and evening options) in the coming weeks to explain the choices and collect enrollment decisions. Council discussed passing a resolution to “hold retirees harmless” — guaranteeing equal or better coverage — and warned that such a policy sets a precedent for future councils.
Next steps: staff asked council to consider whether to adopt plan one or plan four for the under-65 group and to authorize outreach. Several councilors supported further education sessions; staff will schedule presentations and return with refined cost estimates before the budget adoption deadlines.
