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...
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