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City proposes 90/10 health‑premium split in 2026 benefits plan; council asks for more detail on merit pay
Summary
Administrative Services Director Alyssa Farrell proposed shifting employer/employee health premiums to a 90/10 split for 2026, a 25% reserve target for the self‑funded plan, and a 3% plan adjustment; council members requested additional memos on merit bonuses, banked time and HSA policy.
Alyssa Farrell, Administrative Services Director, presented the City of Aspen’s proposed 2026 total compensation and benefits package and said staff recommends moving to a 90/10 employer/employee split on health plan premiums (up from an 85/15 split). Farrell said the change would not increase deductibles or out‑of‑pocket maximums and that estimated additional premium cost to employees would be about $14–$21 per pay period pretax; staff is targeting a 25% reserve for the partially self‑funded health plan.
Farrell described the city’s total compensation philosophy, proposed a 3% move of the pay plan for 2026 with up to a 5% merit increase pool, and noted the city will start a more comprehensive compensation study in Fall 2025. Council members raised implementation questions: several asked for a written memo explaining how merit bonuses are awarded (one councilor criticized the current structure as resembling a cost‑of‑living adjustment rather than true merit pay), asked whether HSA contributions should increase if premiums shift, and requested a review of banked/credit time policies. Farrell said the incoming HR director (starting Aug. 4) and an HRIS replacement will inform changes and staff will return with more analysis.
