City Employee Benefits Renewal & Claims Cost Projections

1.

City Employee Benefits Renewal &
Claims Cost Projections
Renewal budget impact review and approval — City Council,
August 2, 2026
City benefits cost rising from $16.03M to $17.485M at renewal
SIGNAL

2.

Agenda Overview: Benefits Renewal Session
Call to Order & Roll Call
Consent Agenda Approval
Procedural items completed at the meeting's opening
Motion passed; no items pulled for separate discussion
Benefits Renewal History
Medical & Dental Cost Projections
Review of prior renewal years and trend performance
Medical rising to ~$21M; dental holding flat at renewal
Stop-Loss Coverage Review
City Budget Impact & Approval
Coverage terms and thresholds for council review
City share rises to $17.485M; council vote to approve

3.

Renewal History Since 2012
Year
City Renewal Rate
vs. Business Trend
vs. National Trend
2012
See composite
Benchmark reference
Benchmark reference
2013
See composite
Benchmark reference
Benchmark reference
2014
See composite
Benchmark reference
Benchmark reference
2015
See composite
Benchmark reference
Benchmark reference
2016
See composite
Benchmark reference
Benchmark reference
2017
See composite
Benchmark reference
Benchmark reference
2018
See composite
Benchmark reference
Benchmark reference
2019
See composite
Benchmark reference
Benchmark reference
Composite Avg
Below trend most
years
Business trend
survey
National trend survey
Year-over-year renewal results
by program go back to 2012,
with a composite average in
the bottom row. Benchmarks
draw from business and
national trend surveys. In
many years the city came in
below trend, reflecting a strong
record of cost management
against broader market
pressures.

4.

Medical Cost Projections at Renewal
Item
Current
Renewal
Change
Total Medical Costs
~$20M
$21M
--
City Medical
Contribution
$15.398M
$16.849M
+$1.451M (+9%)
City Dental
Contribution
$0.636M
$0.636M
No increase
Combined City
Contribution
~$16M
$17.485M
--
Projections use 24 months of
historical claims (April 2019
through March 2020), trended
at 5-7% medical cost rate to
next year's midpoint.
City medical contribution rises
$1.451M, a 9% increase.
Dental costs hold flat; city
dental share stays at $635,804
per year.
Combined city contribution
grows from roughly $16M to
$17.485M.

5.

Dental Costs and Combined City Contribution
Program
City Contribution
Change
Medical
$16,849,000
+$1,451,000 (9%)
Dental
$635,804
No increase
Combined Total
$17,484,804
+$1,451,000
Dental carries no increase
this renewal cycle.
City dental share holds flat
at $635,804 per year.
Medical rises from
$15,398,000 to
$16,849,000.
The 9% medical rate drives
the full $1,451,000 increase.
Combined city contribution
moves from ~$16M to
$17.485M.

6.

Claims Projection Method
Historical Claims Base
Reimbursement Method
Projections use 24 months of claims history. April 2019 through March 2020
recorded $18.576M in medical claims plus $2.5M in Rx, totaling $21M. A
commercial market trend of 5 to 7 percent is applied to carry costs to the
midpoint of the renewal year, using carrier and external benchmark data.
Raw claims totals are reduced by stop-loss reimbursements before trending
forward. Reimbursements are calculated against both individual and aggregate
thresholds, preventing high-claim years from distorting the baseline. Only net-ofreimbursement figures feed the projection model, producing a stable renewal
pricing foundation.
01
02
Administrative Fee
Individual Stop-Loss
The annual administrative fee is approximately $600K, covering third-party
administrator and plan management costs.
Individual stop-loss premium is $1.3M annually, guarding against high-cost singlemember claims.
03
04
Aggregate Stop-Loss
Total Projected Cost
Aggregate stop-loss is set at $25M. Claims above this total are covered by the
carrier, capping city liability.
Medical claims, admin fee, and stop-loss premiums combined project total plan
costs at approximately $21.937M.

7.

Total Projected Renewal Cost: $21.937M
$21,937,000
Includes medical claims, admin fees (~$600K), and stop-loss (~$1.3M); stoploss absorbs any costs over the $25M aggregate.
SIGNAL

8.

Summary & Next Steps
City contribution rises to $17.485M (9% medical increase, dental flat). Council approval of the $21.937M total
renewal cost is required to proceed.
Approve $21.937M renewal
Confirm effective date