City staff offers insurance trade‑offs; council asks for side‑by‑side comparison before decision

City human resources officials and benefits consultants presented new design and contribution options on Tuesday to address a projected shortfall in the municipal health‑insurance fund, and council asked staff to return with a side‑by‑side comparison and local benchmarks before making a final decision.

"These options are intended to help address the projected health insurance fund deficit while maintaining access to medical coverage for our employees, retirees and their families," HR director Carolina Thirkell said, summarizing the staff brief.

Staff presented two additional scenarios on top of earlier options: a plan that converts the current PPO to an HMO and applies contribution increases (10% and 15% scenarios) and a mixed design that preserves a high‑deductible PPO option plus an HMO and a PPO with a widened contribution spread. Depending on the combination, staff estimated savings of roughly $5.8M–$7.3M from plan design changes and contribution increases; estimated remaining deficits ranged from roughly $871,000 to a potential surplus in the best‑case 15% scenario with contribution spreads.

Council focused questions on who would be affected by higher out‑of‑pocket maximums and deductible changes, prescription drug cost sharing (including high‑cost GLP‑1 drugs), retiree protections and whether employees might drop coverage. Benefits staff and the broker said the high‑deductible health plan (HDHP) remains a PPO with a lower out‑of‑pocket maximum than the PPO option under some proposals and that the city currently maintains stop‑loss coverage to limit catastrophic exposure (per‑claim attachment cited at $300,000). Staff also noted available resources—MDLive telemedicine, an on‑site wellness clinic and an urgent‑care arrangement—that could reduce utilization of higher‑cost services.

Councilmember (speaker 19) moved and the council approved a request that staff produce a one‑page, side‑by‑side spreadsheet comparing all plan options (including contribution amounts, projected employee biweekly impacts and out‑of‑pocket implications), and that staff include local benchmarks (school district, county) where available. Staff agreed to produce the comparison within the week and return the item for a final decision at the next meeting so open‑enrollment preparations can proceed.

Staff emphasized the practical timeline: new rates, contribution levels and plan designs must be loaded into the city benefits system and with the carrier in time to support July open enrollment and ID‑card generation; staff recommended a decision by the June 15 meeting to meet vendor and carrier deadlines.

Next steps: Staff will prepare the comparative spreadsheet and benchmark analysis, then return the item to council for a decision before open enrollment.