10-13-2025 Agenda Packet Cc - Regular Meeting

Home Browse Search

AGENDA ITEM Date: October 13, 2025 Title: Health Insurance Plan Approval Presenter: Maggie Jin, Finance Director Section: Consent Agenda Purpose: To gain approval for the 2026 health insurance plan for employees. Item: 6 2. Background: At the August 11, 2025 council meeting, staff informed City Council that the health insurance plan was up for renewal, thus open to a request for proposal process. The request for proposal was led by the City's health insurance broker Gallagher and ended on September 8, 2025. Renewal rates with the current provider, Public Employee Insurance Plan (PEIP), was received on September 26, 2025. Since then an ad -hoc staff committee was formed with one staff from each of the City's bargaining units along with the Human Resources team and they have met to discuss the options. There was a total of 6 carriers that submitted proposals, with 3 finalists considered alongside PEIP's renewal rates. The favorable option for health insurance plan was an embedded method for deductible. The ad - hoc committee was split between the 2 plans with PEIP and Better Health Collective (BHC). Both options have pros and cons with the pros for PEIP outweighing BHC in the short-term. PEIP is the current carrier thus no transition burden, the deductible limits are lower though there is still a cost associated with care after deductible limit is hit. However, max out-of-pocket cost is lower than BHC. Administratively, PEIP has different cost level for different clinics that is cumbersome, however, since it is a carryforward plan, employees are already set-up with their clinic. If the City renews with PEIP, it will be locked in for a 4-year contract. Only if premium cost is more than 20%, the City can exit the plan. BHC does not have a multi -year contract lock and provides a rate cap of 15% in 2027. PEIP has historical data with the City of Orono which is favorable when reviewing year by year cost, whereas BHC does not. 3. Cost: Staying with PEIP for 2026 is a cost savings of $57,705 per current employees' benefit elections. PEIP rates will remain the same in 2026 as it is in 2025. BHC came in 6.7% higher than PEIP's rates. 4. Staff Recommendation: Staff recommends renewing with Public Employee Insurance Plan (PEIP) with a four-year contract starting with 2026 health insurance plan for city employees. COUNCIL ACTION REQUESTED Motion to approve the 2026 health insurance plan with PEIP for city employees. Exhibits A. 2026 Health Plan Options 44