TO: Mayor and City Council
FROM: Elizabeth Coronado Abrego, Director of Human Resources
SUBJECT:
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Approval of Group Health, Dental, Vision, and Life Insurance Renewal for Active and Retiree Employees
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BACKGROUND:
The City of Joliet provides a self-funded health insurance plan for active employees and pre-65 retirees through Blue Cross Blue Shield of Illinois (BCBSIL). Active employees and pre-65 retirees can enroll in the HMO, PPO, or HDHP medical plans. The City also provides group health, dental, vision, and life insurance benefits (“benefits”) to approximately 120 non-union employees/officials, 725 union employees, and 745 retirees.
Benefits for non-union employees are governed by ordinance, while union employee benefits are governed by collective bargaining agreements.
The purpose of this agenda item is to renew the contract with Blue Cross Blue Shield of Illinois for health, dental, and vision insurance and adopt the benefits offered to active and retired employees for plan year 2027.
Medical Plans (PPO, HMO, HDHP)
Although the PPO plan design remains stable, the City’s per-employee/retiree per-year (PEPY) cost remains higher than the MMA benchmark.
• MMA benchmark average annual PEPY: $22,561.56
• City of Joliet current PEPY: $23,961.35
The City is expanding its health insurance offerings to include both HMO and HDHP plan options for 2027, giving employees more choices to align their coverage with their individual healthcare needs and financial preferences.
Additionally, the City is also introducing the Benistar Medicare Advantage solution for post-65 retirees, providing a streamlined, cost-effective group retiree medical plan supported by Medicare-trained specialists and enhanced benefit coordination.
BCBSIL’s 2027 medical renewal rate is 7%. The City recommends approving the renewal rates for the PPO, HMO, and HDHP medical plans. Proposed rates are attached.
Projected Cost Impact
BCBSIL estimates an overall City cost increase of 7.65% for 2027. This projected increase includes:
• Claims administration
• Prescription drug rebates
• Expected claims experience
• Stop-loss coverage for claims exceeding $240,000 per covered individual
Vision Coverage Update (Non-Union Only)
Staff reviewed the current vision benefit available to members enrolled in the $500 and $750 deductible plans and recommends transitioning to VSP, which offers a broader network with more independent providers rather than exclusively large retail chains.
Our broker successfully negotiated a 4-year rate guarantee for the VSP vision plan. Due to current collective bargaining agreements, this updated vision benefit can only be extended to non-union employees at this time.
CONCLUSION:
Approval of this item will renew employee insurance offerings for 2027.
RECOMMENDATION:
recommendation
Based on the above, it is recommended that the Mayor and City Council approve the Group Health, Dental, Vision, and Life Insurance Renewal for Active and Retired Employees.
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