Council considers modest employee premium increase and adding an HSA option

Human Resources Director Tara McCulloch told council the administration’s recommendation was to keep the existing PPO (to honor bargaining-unit requirements) and add a high-deductible HSA option for employees who prefer it. She proposed increasing non‑bargaining employee contributions to 8% of premium for wellness participants and 9% for non‑participants, noting that those rates represented an increase over current flat-dollar contributions that have not changed since 2020.

"I recommended full HSA funding only during the first year of implementation to encourage participation," McCulloch said, adding that HSA deposits become the employee's property and could leave with employees who depart. She estimated that if 15 employees elected the HSA and the city fully funded year-one contributions, the cost would be roughly $87,000, which could be partially offset by increased employee premium collections.

Council members asked for a spreadsheet showing current contribution amounts and the proposed percentages with dollar impacts; Director McCulloch agreed to provide the worksheet and to include COBRA-rate calculations used to finalize employee contributions. She also cautioned that bargaining agreements already include negotiated, percentage-based contribution rates for OPBA and IAFF members and that maintaining distinctions between bargaining and non-bargaining employees would be necessary.