Explanation
BACKGROUND:
Funding for pharmacy third-party administration services is necessary to ensure continuation of the city’s pharmacy program. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Human Resources Department requests to modify the existing contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation by adding funding for January 1, 2027 through December 31, 2027 for this program.
The initial contract for the term February 1, 2026 through December 31, 2028, was legislated through ordinance 3370-2025.
Cost estimates for 2027 are based on 2024, 2025 and 2026 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 consultant. The Human Resources Department requests funding for January 1, 2027 through December 31, 2027.
The maximum obligation liability for pharmacy third-party administration services from January 1, 2027 through December 31, 2027 is $75,800,000.00.
This ordinance is contingent on the passage of the 2027 insurance appropriation ordinance 2680-2026.
FISCAL IMPACT: Funding is available in the 2027 Employee Benefits Fund for this contract.
Title
To authorize the Director of the Human Resources Department to modify the contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to add funding, and to provide all eligible employees and eligible COBRA participants with pharmacy services from January 1, 2027 through December 31, 2027; to authorize the expenditure of $75,800,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of said contract. ($75,800,000.00)
Body
WHEREAS, it is in the best interest of the City of Columbus to modify the contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to add funding, and to provide all eligible employees and eligible COBRA participants with pharmacy services from January 1, 2027 through December 31, 2027; and
WHEREAS, it is necessary to authorize the expenditure of up to $75,800,000.00, or so much thereof as may be necessary to pay contract costs for pharmacy services; and
WHEREAS, it has become necessary in the usual daily operation of the Department of Human Resources to request a contract modification and expenditure authority; 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 modify the contract with CaremarkPCS Health, L.L.C., and Employers Health Purchasing Corporation to add funding for pharmacy services from January 1, 2027 through December 31, 2027.
SECTION 2. That the expenditure of $75,800,000.00 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: $800,000.00 (Rx Admin fees)
Department: 4602 | Fund: 5502 | Subfund: 550207 | Program: RM006 | Amount: $75,000,000.00 (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 this ordinance shall take effect and be in force from and after the earliest period allowed by law.