Title
Approving an application from Blue Cross and Blue Shield of Texas (BCBSTX) for medical and prescription benefits and an application from Dearborn Life Insurance Company for Voluntary Life/Accidental Death and Dismemberment (AD&D) and Long-Term Disability benefits in 2025, and authorizing the City Manager to execute the same.
Summary
On October 24, 2023, the City Council approved to award the City’s medical and prescription benefits contract to Blue Cross Blue Shield TX (BCBSTX) for 2024. BCBSTX initially offered the City a 5.0% (or $234,386) premium increase for medical and prescription benefits in 2025. This increase is below the average market premium increase and below the expected premium increase based on the City’s loss ratio. The City consulted with our insurance broker, HUB International (HUB) and determined that it is in the best interest of the City to remain with BCBSTX for medical and prescription benefits in 2025.
After completing the Request for Proposal (RFP) process led by HUB and the City, the recommendation was made to bundle Dearborn Life Insurance Company Voluntary Life/AD&D and Long-Term Disability benefits with the BCBSTX medical and prescription benefits for a discount in 2025. BCBSTX is the trade name of Dearborn Life Insurance Company, an independent licensee of the Blue Cross and Blue Shield Association. By bundling these benefit products, the City’s premium increase for medical and prescription benefits was reduced to 4.2% (or $197,478.) The City’s premiums for Voluntary Life/AD&D and Long-Term Disability benefits are reduced by 11% from 2024 premiums.Enter Text Here
This item is supported by the {Safety/Infrastructure/Economic Development/Services} pillar of the Strategic Plan.
Prior City Council Action
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
November 12, 2024
Funding Expected: Revenue __ Expenditure X__ N/A __
Budgeted Item: Yes X__ No __ N/A __
Amount: Medical and Prescription benefits $4,885,323 per year, this is an increase of $197,478 or 4.2% above the current plan.
Voluntary Life/AD&D and Long-Term Disability benefits $146,364, this is a decrease of $18,112 or 11% below the current plan.
1295 Form Required? Yes X__ No __
Legal Review Required: N/A __ Required X__ Date Completed: 10-9-2024
Supporting documents attached:
Benefit Program Application BCBSTX
Dearborn Life Insurance Application
Pflugerville 2025 RFP Analysis by HUB
Recommended Action
Approve an agreement with Blue Cross and Blue Shield of Texas (BCBSTX) for medical and prescription benefits and an agreement from Dearborn Life Insurance Company for Voluntary Life/ AD&D and Long-Term Disability benefits in 2025, and authorize the City Manager to execute the same.