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City staff propose benefits renewal with new HDHP option and $400 HSA contribution
Summary
HR Director Tiffany Lanford and consultant John BC recommended renewing employee benefits for an estimated $2.3 million premium equivalent (a 5.83% increase), noted a 2.5% admin fee increase and an estimated 19.62% stop-loss quote, and proposed a $2,000 high-deductible plan with a $400 city HSA contribution if employees contribute at least $100.
Tiffany Lanford, the city's HR director, introduced consultant John BC of 1 Digital to present the employee benefits renewal and proposed plan design changes. The consultants proposed a recommended annual premium equivalent of $2,300,000 (a 5.83% increase) and said an admin fee increase of 2.5% equates to roughly $4,800. They further presented a stop-loss (reinsurance) quote that could increase by about 19.62, which the consultant described as a 'worst case' estimate while vendor marketing is ongoing.
The consultant described adding a middle, high-deductible health plan with a $2,000 deductible that would sit between the city's existing $1,000 and $4,000 deductible plans. "We are going to add 0.333 plan or the recommendation is to add 0.333 plan this year... It is called a high deductible health plan," he said, and staff recommended the city contribute $400 annually to an employee's HSA if the employee contributes at least $100. The presentation included projected medical and pharmacy claims, estimated annual pharmacy rebates of $55,000 and a proposal to continue the PBM contract with ProAct.
Councilmembers asked clarifying questions about stop-loss mechanics and how employee costs change under the plans. Staff said employee communications and open-enrollment counselling will be provided so employees can make informed choices between plan tiers. The council agreed to place the benefits renewal on the consent agenda pending routine review and any further negotiation with carriers.
