Title
Authority for the City Manager to sign all contracts relating to the City's selection of Cigna Healthcare for the provision of the City's employment benefits beginning January 1, 2027, such benefits to include medical, dental, and vision.
Summary
It is proposed that the City of Pflugerville select Cigna Health Care to provide medical, prescription, dental, and vision benefits. In calendar year 2027, the Medical and Prescription benefit plan will cost an estimated $5,377,764. Employees pay approximately $665,838 in premiums towards their medical and prescription coverage. The City's share, covering both the plan and the City’s Health Savings Account (HSA) contributions, is expected to be approximately $4,711,926 which is within the FY27 budgeted amount of $5,324,127.
All dental proposals received represented a 40% increase. Cigna offered the best rates to the City for dental benefits and will offer a choice of two dental plans for employees. The dental plan will cost an estimated $375,313 per year. The City's portion is $274,597 and the budgeted amount is $178,000. Savings from the medical and prescription plan will help cover the overage in dental. Vision benefit premiums are paid by employees and there is no cost to the City.
In August 2026, the City partnered with HUB International to complete a Request for Proposal (RFP) for medical, prescription, dental, and vision benefits effective January 1, 2027. Working with HUB and Cigna to bundle medical, prescription, dental, and vision benefits, the City is able to make modest modifications and keep employee contributions aligned with last year's prices. Cigna was the most competitive medical and prescription bid.
The City will offer three medical and prescription plan options to employees in 2027. Due to the competitive medical rate, the City intends to minimize the impact on employees' premium costs through budget savings. The result is a plan designed to minimize increases to employee premiums while offering a plan that remains competitive with other employers (private and public).
The attached items include the RFP Presentation 2027 - Pflugerville which outlines the bids received and options resulting in the recommendation of Cigna. The City of Pflugerville Proposal with Cap document is the full Cigna financial proposal. The Application for Group Coverage and the City of Pflugerville Rate Cap is signed by the City Manager after Council's authorization. By signing the required New York State Department of Health Payor Election Application, the City of Pflugerville authorizes Cigna to administer the City’s level-funded health plan. By signing the application, the City also agrees to participate in the New York Surcharge Pool, which provides access to reduced claim charges available under the level-funded plan.
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.
Funding Expected: Revenue __ Expenditure X__ N/A __
Budgeted Item: Yes X__ No __ N/A __
Budget Source: General Fund and Utility Fund
Budgeted Amount: $5,324,127 for Medical and $178,000 for Dental
Amount: Medical: $5,377,764, City's portion: $4,711,926 Dental: $375,313, City's portion: $274,597.
1295 Form Required? Yes _X_ No __
Legal Review Required: N/A __ Required X__ Date Completed:10-14-2026 ______________
Supporting documents attached:
RFP Presentation 2027- Pflugerville
City of Pflugerville Proposal with Cap
Application for Group Coverage
City of Pflugerville Rate Cap
New York State Department of Health Payor Election Application
Recommended Action
Approve the City Manager to execute all contracts and supporting documents related to the City’s selection of Cigna Health Care for the provision of employee medical, prescription, dental, and vision benefits beginning January 1, 2027, including a Benefit Program Application with Cigna Health Care in the amount of $5,377,764 for medical and prescription benefits and $375,313 for dental benefits.