Title
An Ordinance approving the Calendar Year 2026 Employee Benefit Programs; approving agreements for services by and between the City of Lee’s Summit, Missouri and Cigna Health and Life Insurance Company, Metropolitan Life Insurance Company, Hartford Life and Accident Insurance Company, CuraLinc, LLC, P&A Group, and Allstate Insurance Company, authorizing the City Manager to execute agreements and other documents as necessary to administer employee benefits for Calendar Year 2026 by and on behalf of the City and containing an emergency clause.
Body
Issue/Request:
The City has existing contracts with most of these providers that allow for renewal. P&A Group and Allstate Insurance Company will be new providers and therefore require a new contract.
The City’s health renewal rates have been artificially low due to a rate increase lock for the 2025 renewal (which was raised as a concern when presenting last year’s ordinance {pg6}). The calculated increase for last year was 26%. While it may have been negotiated down 5 or 10 points, the City renewed at the much lower 9.5% rate increase cap. Additionally, the City’s claims have increased at a disproportional rate than was expected, given the city’s last few years of history.
Our initial 2026 renewal was returned at a 24% increase, so we took our plan to market. Considering the above and our current high spending on outsized claims, 2 of the 4 companies requested declined to bid (a rarity reflecting our plans high claims). Of the remaining two, Cigna (our current provider) provided a competitive bid and is recommended to minimize disruption to city employees. The changes laid out below were necessary to achieve a more palatable annual increase. Along with fully funded options, ASO (self-funding) options were also quoted during the marketing efforts, as well as, third party stop loss marketing (included in appendix). This was not a fiscally viable solution given the city’s claims performance. The changes laid out below were necessary to achieve a more palatable annual increase while maintaining quality medical plans for city employees.
Key Issues:
Medical renewal with Cigna will involve the following changes:
• Offering a single PPO option (instead of two)
• Increases to Deductible, Co-insurance, and Out of Pocket Maximums on the PPO plan
• Minimal increases to deductible and Out of Pocket Maximums on the HDHP (only IRS required updates)
• Offering employees discounted rates on both plans through a ‘new to the city’ narrow network.
• An aggregate 15.5% premium increase.
-Dental renewal with Cigna will have a 6.7% premium increase.
-Vision renewal with MetLife will have a 0% premium increase.
Prooposed Motion:
I move for second reading of Bill No.XXX entitled an Ordinance approving the Calendar Year 2026 Employee Benefit Programs; approving agreements for services by and between the City of Lee’s Summit, Missouri and Cigna Health and Life Insurance Company, Metropolitan Life Insurance Company, Hartford Life and Accident Insurance Company, CuraLinc, LLC, P&A Group, and Allstate Insurance Company, authorizing the City Manager to execute agreements and other documents as necessary to administer employee benefits for Calendar Year 2026 by and on behalf of the City and containing an emergency clause.
I move for adoption of Bill No. XXX entitled an Ordinance approving the Calendar Year 2026 Employee Benefit Programs; approving agreements for services by and between the City of Lee’s Summit, Missouri and Cigna Health and Life Insurance Company, Metropolitan Life Insurance Company, Hartford Life and Accident Insurance Company, CuraLinc, LLC, P&A Group, and Allstate Insurance Company, authorizing the City Manager to execute agreements and other documents as necessary to administer employee benefits for Calendar Year 2026 by and on behalf of the City and containing an emergency clause.
Presenter
Jennifer Vargo, Human Resources Director
Christina Garside, Benefits Specialist
Matt Wheeler, VP, Client Service, Holmes Murphy
Recommendation
Staff recommends approval.