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AGENDA ITEM <br />Date: August 11, 2025 <br />Title: Request for Proposals - Health Insurance <br />Presenter: Maggie Jin, Finance Director <br />Section: Consent Agenda <br />Item: 9 <br />Purpose: <br />The purpose of this council item is to inform City Council of the upcoming request for proposals <br />for the 2026 health insurance plan for employees. <br />2. Background: <br />Back in May 2020, the City left the LOGIS health insurance pool and Gallagher broker service <br />with the goal of providing better quality benefits at a more reasonable cost. The City switched to <br />Health Partners through Paychex brokerage. However, in 2022, the rates were showing a <br />significant increase of 25%, thus the City went back to Gallagher as the health insurance broker <br />and transitioned to the Public Employees Insurance Plan (PEIP) for 2022 and 2023 plan years. The <br />City automatically renewed with PEIP for another 2-year term covering 2024 and 2025 plan years. <br />Both years' rates decreased, which was the opposite of market trend. <br />With the April 2024 legislature session, the house, governor, and senate recently passed a new bill <br />for PEIP. Changes to the program includes participants to sign up for a four-year commitment <br />(current is two-year). The new bill also changed the threshold for groups to exit the pool when <br />premiums increase 20% or more (current threshold is 50% or more). <br />To follow best practice, since the City is at the end of its two-year contract with PEIP, the City will <br />be going out for request for proposals (RFP) for employee health insurance plan in August with <br />the anticipated quotes to be received late September. The RFP process is intended to fall in line <br />with receiving Public Employees Insurance Plan's (PEIP) renewal rates. Current trend in health <br />insurance cost is anticipating an average of 9-12% increase, however, can easily exceed 20%. <br />3. Process: <br />The RFP for health insurance will be conducted by Gallagher with the results to be received in late <br />September. <br />4. Staff Recommendation: <br />No action is required. This is an information item only. <br />COUNCIL ACTION REQUESTED <br />No action is required. This is an information item only. <br />56 <br />