Explanation
BACKGROUND:
Funding for the medical insurance program is necessary to ensure continuation of the city’s medical program. Included within the medical program are COBRA and tobacco cessation services. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Department of Human Resources requests to contract with Community Insurance Company dba Anthem Blue Cross and Blue Shield and 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, our employee benefits and wellness consultant, went out to bid for a medical and pharmacy third party administrator via RFP030095.
The RFP team interviewed 3 medical program finalists. After careful consideration and evaluation, Community Insurance Company dba Anthem Blue Cross and Blue Shield was selected as being the lowest and best bid for medical third-party administrator services for the city.
Cost estimates for 2026 are based on weighted 2023, 2024 and 2025 benefit fund expenditures, using a weighted 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 Community Insurance Company dba Anthem Blue Cross and Blue Shield and to provide for funding February 1, 2026 through December 31, 2026.
Outside of the Community Insurance Company dba Anthem Blue Cross and Blue Shield contract, but included in the medical program appropriations, are the annual Patient-Centered Outcomes Research Institute (PCORI) fee appropriations at $85,000.00. PCORI fees were initiated as part of the Affordable Care Act of 2010 and provide revenue for the institute to conduct research to help patients, and their caregivers make better-informed health decisions by providing evidence on the effectiveness of different medical treatments and services.
The maximum obligation liability for medical, COBRA, tobacco cessation services, and PCORI fees from February 1, 2026 through December 31, 2026 for Community Insurance Company dba Anthem Blue Cross and Blue Shield is $139,674,000.00.
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 and PCORI fees.
Title
To authorize the Director of the Human Resources Department to enter into a contract with Community Insurance Company dba Anthem Blue Cross and Blue Shield and to provide all eligible employees medical and tobacco cessation programs and eligible terminated participants with COBRA coverage from February 1, 2026 through December 31, 2026; to authorize the expenditure of $139,674,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of said contract and PCORI fees; and to declare an emergency. ($139,674,000.00)
Body
WHEREAS, it is in the best interest of the City of Columbus to enter into a contract with Community Insurance Company dba Anthem Blue Cross and Blue Shield to provide all eligible employees medical and tobacco cessation programs and eligible terminated participants with COBRA coverage from February 1, 2026 through December 31, 2026; and
WHEREAS, it is necessary to authorize the expenditure of up to $139,589,000.00, or so much thereof as may be necessary to pay contract costs for medical, COBRA, and tobacco cessation programs; and
WHEREAS, it is necessary to authorize the expenditure of up to $85,000.00, or so much thereof as may be necessary to pay PCORI fees; 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 medical, COBRA and tobacco cessation programs are 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 Community Insurance Company dba Anthem Blue Cross and Blue Shield to provide medical, COBRA, and tobacco cessation programs from February 1, 2026 through December 31, 2026.
SECTION 2. That the expenditure of $139,674,000.00 or so much thereof as may be necessary for coverage is hereby authorized to be expended as follows:
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM005 | Amount: $5,500,000.00 (Medical Admin fees)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM006 | Amount: $134,085,000.00 (Medical Claims and PCORI fees)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM003 | Amount: $40,000.00 (COBRA fees)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM004 | Amount: $49,000.00 (Tobacco cessation fees)
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.