Explanation
BACKGROUND:
Funding for prescription drug (Rx) insurance is necessary to ensure continuation of the city’s Rx insurance program. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Department of Human Resources requests to contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to provide funding from February 1, 2026 through December 31, 2026 for this program. This ordinance represents the first year of this contract. This contract has an initial term of 11 months and will continue, with approved appropriations, until December 31, 2028 with the option of two one-year renewals.
In April of 2025, the Department of Human Resources, with assistance from Marsh & McLennan Agency, the City’s employee benefits and wellness consultant, went out to bid for a medical and pharmacy third party administrator via RFP030095.
The RFP team interviewed 6 Rx program finalists. After careful consideration and evaluation, CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation was selected as being the lowest and best bid for pharmacy third-party administrator services for the City.
Cost estimates for 2026 are based on weighted 2023, 2024 and 2025 benefit fund expenditures, using an average of actual city utilization, expected changes due to union negotiations, as well as input from the City's employee benefits and wellness consultant. The Department of Human Resources requests to contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation and to provide for funding February 1, 2026 through December 31, 2026.
The maximum obligation liability for Rx services from February 1, 2026 through December 31, 2026 is $61,575,000.00.
This ordinance is contingent on the passage of the 2026 insurance appropriation ordinance 3195-2025.
Emergency action is requested to ensure the programs for city employees and eligible terminated participants are able to commence as soon as contractually possible, thereby maintaining continuity of service.
FISCAL IMPACT: Funding is available in the 2026 Employee Benefits Fund for this contract.
Title
To authorize the Director of the Human Resources Department to enter into a contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation and to provide all eligible employees Rx program services from February 1, 2026 through December 31, 2026; to authorize the expenditure of $61,575,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of said contract; and to declare an emergency. ($61,575,000.00)
Body
WHEREAS, it is in the best interest of the City of Columbus to enter into a contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to provide all eligible employees Rx program services from February 1, 2026 through December 31, 2026; and
WHEREAS, it is necessary to authorize the expenditure of up to $61,575,000.00, or so much thereof as may be necessary to pay contract costs for Rx program services; and
WHEREAS, an emergency exists in the usual daily operations of the Department of Human Resources in that it is immediately necessary to authorize the Director of Human Resources to enter into contract and expend funds to ensure the Rx program is able to commence as soon as contractually possible, thereby maintaining continuity of service; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Human Resources is hereby authorized to enter into contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to provide Rx program services from February 1, 2026 through December 31, 2026.
SECTION 2. That the expenditure of $61,575,000.00 or so much thereof as may be necessary for coverage is hereby authorized to be expended as follows:
Department: 4602 | Fund: 5502 | Subfund: 550207 | Program: RM005 | Amount: $575,000.00 (Rx Admin fees)
Department: 4602 | Fund: 5502 | Subfund: 550207 | Program: RM006 | Amount: $61,000,000.00 (Rx Claims)
SECTION 3. That the funds necessary to carry out the purpose of this ordinance are hereby deemed appropriated, and the City Auditor shall establish such accounting codes as necessary.
SECTION 4. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor or ten days after passage, if the Mayor neither approves nor vetoes the same.