Title
Approving a Benefit Program Application with Blue Cross and Blue Shield of Texas (BCBSTX) in the amount of $6,083,021 for medical and prescription benefits, and authorizing the City Manager to execute the same.
Summary
It is proposed that the City of Pflugerville select Blue Cross Blue Shield TX (BCBSTX) for the fourth consecutive year to provide medical and prescription benefits. In calendar year 2026, the Medical and Prescription benefit plan will cost an estimated $6,083,021. The City’s share, covering both the plan and the City’s Health Savings Account (HSA) contributions, is expected to be approximately $5,106,180, which is within the FY26 budgeted amount of $5.4 million.
In August 2025, the City partnered with HUB International to complete a Request for Proposal (RFP) for medical and dental benefits effective January 1, 2026. While the initial proposal was significantly higher than budget due to the City’s previous high plan utilization, BCBSTX was the most competitive medical bid. Working with HUB and BCBSTX, the City made small adjustments to the HDHP and PPO plans, added an HMO plan, secured a $100,000 credit, and increased employee contributions, ensuring competitive medical options within budget. Based on the RFP, the City will not change dental providers.
The City will offer three plan options to employees in 2026 with no changes made to the provider network. The result is a plan that keeps employees’ premiums to a minimum and remains competitive with other employers (private and public).
This item is supported by the Brand and Reputation pillar of the Strategic Plan by providing a benefits program competitive with similar cities and positioning Pflugerville to continue to attract and retain top talent and support employees and their families.
Prior City Council Action
Contract approved November 12, 2024 with Blue Cross Blue Shield TX for 2025 medical and prescription benefits. Contract approved with Dearborn Life Insurance Company for Voluntary Life/Accidental Death and Dismemberment (AD&D) and Long-Term Disability.
Contract approved with Blue Cross Blue Shield TX for 2024 medical and prescription benefits on October 24, 2023. Contract approved with New York Life for Voluntary Life/AD&D and Long-Term Disability on October 26, 2021.
Deadline for City Council Action
October 28, 2025
Funding Expected: Revenue __ Expenditure X__ N/A __
Budgeted Item: Yes X__ No __ N/A __
Budget Source: General Fund and Utility Fund
Amount: $6,083,021 with estimated cost to the City of $5,106,180
1295 Form Required? Yes _X_ No __
Legal Review Required: N/A __ Required X__ Date Completed: 10-17-2025
Supporting documents attached:
City of Pflugerville 2025 RFP Analysis
Benefit Program Application "BPA" Blue Cross and Blue Shield of Texas (herein called "BCBSTX") Large Group Plans
Recommended Action
Approve the Benefit Program Application with Blue Cross and Blue Shield of Texas (BCBSTX) for medical and prescription benefits in 2026 and authorize the City Manager to execute the same.