Explanation
BACKGROUND:
Funding for medical third-party administration and COBRA services is necessary to ensure continuation of the city’s medical and COBRA programs. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Human Resources Department requests to modify the existing contract with Community Insurance Company dba Anthem Blue Cross and Blue Shield by adding funding for January 1, 2027 through December 31, 2027 for these programs.
The initial contract for the term February 1, 2026 through December 31, 2028, was legislated through ordinance 3369-2025. A modification was legislated through 2070-2026.
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.
Outside of the Community Insurance Company dba Anthem Blue Cross and Blue Shield contract, but included in the medical program appropriations, are the annual PCORI fee appropriations at $95,000.00.
The maximum obligation liability for medical, COBRA, and PCORI fees from January 1, 2027 through December 31, 2027 is $205,820,000.00.
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 and PCORI fees.
Title
To authorize the Director of the Human Resources Department to modify the contract with Community Insurance Company dba Anthem Blue Cross and Blue Shield to add funding, and to provide all eligible employees medical, and eligible terminated participants with COBRA coverage from January 1, 2027 through December 31, 2027; to authorize the expenditure of $205,820,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the cos...
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