Loading...
HomeMy WebLinkAbout179-25 RESOLUTION Page 1 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 179-25 File Number: 2025-1136 A RESOLUTION TO APPROVE THE 2026 EMPLOYEE BENEFITS PACKAGE THAT INCLUDES HEALTH INSURANCE, DENTAL INSURANCE, LIFE INSURANCE, SHORT TERM DISABILITY INSURANCE, FLEXIBLE SPENDING ACCOUNTS, HEALTH SAVINGS ACCOUNTS, AND SUPPLEMENTAL BENEFITS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the 2026 employee benefits package as recommended in the staff memorandum attached to this Resolution. PASSED and APPROVED on August 5, 2025 Approved: _______________________________ Molly Rawn, Mayor Attest: _______________________________ Kara Paxton, City Clerk Treasurer Mailing address: 113 W. Mountain Street Fayetteville, AR 72701 www.fayetteville-ar.gov CITY COUNCIL MEMO 2025-1136 MEETING OF AUGUST 5, 2025 TO: Mayor Rawn and City Council THRU: Keith Macedo, Chief of Staff FROM: Missy Hutcheson, Human Resources Director SUBJECT: 2026 Employee Benefits Renewal RECOMMENDATION: Staff recommends City Council approve the employee benefits renewal package for 2026 as outlined below and in the attached presentation. BACKGROUND: Staff and Brown & Brown, the City’s benefits broker, have reviewed the annual renewals for employee insurance plans. Employee benefits renewals are brought forward at this time to ensure the annual open enrollment may proceed according to schedule. DISCUSSION: Health Insurance The one-year look back period of the City’s health claims shows a 98.1% utilization rate of claims paid versus premiums paid. The renewal with Arkansas Blue Cross Blue Shield resulted in a 2.6% average increase (HDHP – 2.2%, PPO – 3.0%). The IRS increased the high deductible health plan (HDHP) minimum deductible limits for embedded deductible plans for 2026, resulting in an increase to the HDHP deductible of $100 to $3,400 (individual) and $200 to $6,800 (family). 2026 HSA annual contribution maximums for an individual will be $4,400 (up from $4,300) and for a family $8,750 (up from $8,550). Dental Insurance Renew with AR BCBS, no plan or rate changes. Vision Insurance Renew with AR BCBS, no plan or rate changes. City Paid Life/AD&D, Voluntary Life/AD&D and LTD Benefits Renew these products with USAble through AR BCBS with no changes. Voluntary STD Benefits Renew with American Fidelity with no changes. Flexible Spending Accounts Renew with American Fidelity as administrator with no changes. Mailing address: 113 W. Mountain Street Fayetteville, AR 72701 www.fayetteville-ar.gov Health Savings Accounts Renew with First Security Bank as administrator with no changes. COBRA Administration Renew with Consolidated Admin Services (CAS) as administrator. Supplemental Benefits Paid by Employees Staff recommend continuing to offer additional supplemental benefits to employees through American Fidelity, which include: Disability Income Insurance, Accident Only Insurance, Cancer Insurance, Critical Illness Insurance, Life Insurance, AF Term Life Insurance, AF Term 100 Life Insurance, 98.AF Permanent Life Insurance, Hospital Gap Insurance and Short Term Disability Insurance. BUDGET/STAFF IMPACT: The costs of these planned insurance/benefit items are being budgeted in the City’s 2026 budget. ATTACHMENTS: 3. Staff Review Form, 4. BB Presentation-Council 2026 - Final Page 1 City of Fayetteville, Arkansas Legislation Text 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 File #: 2025-1136 A RESOLUTION TO APPROVE THE 2026 EMPLOYEE BENEFITS PACKAGE THAT INCLUDES HEALTH INSURANCE, DENTAL INSURANCE, LIFE INSURANCE, SHORT TERM DISABILITY INSURANCE, FLEXIBLE SPENDING ACCOUNTS, HEALTH SAVINGS ACCOUNTS, AND SUPPLEMENTAL BENEFITS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the 2026 employee benefits package as recommended in the staff memorandum attached to this Resolution. City of Fayetteville Staff Review Form 2025-1136 Item ID 8/5/2025 City Council Meeting Date - Agenda Item Only N/A for Non-Agenda Item Missy Hutcheson 7/7/2025 HUMAN RESOURCES (120) Submitted By Submitted Date Division / Department Action Recommendation: Staff recommends City Council approve the 2026 employee benefits renewal package. Budget Impact: XXXX.XXX.XXXX-5108.XX Citywide Account Number Fund Project Number Project Title Budgeted Item?Yes Total Amended Budget $9,098,978.00 Expenses (Actual+Encum)$4,254,109.00 Available Budget $4,844,869.00 Does item have a direct cost?No Item Cost $- Is a Budget Adjustment attached?No Budget Adjustment $- Remaining Budget $4,844,869.00 V20221130 Purchase Order Number:Previous Ordinance or Resolution # Change Order Number:Approval Date: Original Contract Number: Comments: Brown & Brown of Arkansas, Inc.Presented By: Todd Setser Renewal Analysis and Process July 2025 Overview -Medical Medical-BCBS •Original Renewal 9% -reduced to 2.6% •Packaged with Dental, Vision, Life, Disability •2021 CY Loss Ratio was 131% •2022 CY Loss Ratio was 111.3% •2023 CY Loss Ratio was 92.74% •2024 CY Loss Ratio was 98.5% •2025 YTD through 4/2025 = 98.92% Vision-BCBS VSP •2026 Rate Hold; no plan changes Dental-BCBS •2026 Rate Hold; no plan changes Base Life & LTD-USAble •2026 Rate Hold; no plan changes FSA-American Fidelity •Continue with administrator HSA-First Security Bank •Continue with current administrator Cobra-CAS •Continue with current administer Voluntary Benefits-American Fidelity •Renew all benefits with no changes BROWN & BROWN | 2 Historical Lookback BROWN & BROWN | 3 Renewal Year Percent of Increase 2016 6.4% 2017 5.6% 2018 20% 2019 15% 2020 0% 2021 6% 2022 16.8% 2023 16.8% 2024 4.9% 2025 3.7% 2026 2.6% Experience Period Total Claims Premium Paid Loss Ratio 5/1/15 - 4/30/16 $4,322,202 $4,216,666 102.5% 5/1/16 - 4/20/17 $4,576,036 $4,513,431 101.4% 5/1/17 - 4/30/18 $4,713,036 $4,913,154 95.3% 5/1/18 - 4/30/19 $4,831,586 $5,757,503 83.9% 5/1/19 - 4/30/20 $5,455,647 $6,274,795 86.9% 5/1/20 - 4/20/21 $5,719,772 $6,270,906 91.2% 5/1/21 - 4/30/22 $7,289,359 $6,248,761 116.7% 5/1/22 - 4/30/23 $6,897,808 $6,084,374 113.3% 5/1/23-4/30/24 $6,728,829 $7,319,883 92% 5/1/24-4/30/25 $7,923,055 $8,009,406 99% Totals $58,457,330 $59,608,879 98.1% Medical-HDHP BROWN & BROWN | 4 Deductible change due to IRS revised limit for embedded deductibles Benefit Comparison Eligibility Definition Annual Individual / Family Deductible Deductible Type Coinsurance Annual Out-of-Pocket Maximum Out-of-Network Coinsurance Preventive Benefit RX - Tier 1 / Tier 2 / Tier 3 RX - Specialty RX Mail Order - 90 Day Supply CURRENT Renewal Medical BCBS of Arkansas BCBS of Arkansas In-Network In-Network $3,300 HDHP $3,400 HDHP Non Grandfathered Non Grandfathered Embedded Embedded $3,300 / $6,600 $3,400 / $6,800 All Actively at Work Full Time Employees All Actively at Work Full Time Employees Member pays 20% AD Member pays 20% AD Member pays 0% AD Member pays 0% AD $3,300 / $6,600 $3,400 / $6,800 No Charge if In-Network No Charge if In-Network Member pays 0% AD Member pays 0% AD Member pays 0% AD Member pays 0% AD Available Available Medical-PPO Plan BROWN & BROWN | 5 Benefit Comparison Eligibility Definition Annual Individual / Family Deductible Deductible Type Coinsurance Annual Out-of-Pocket Maximum Out-of-Network Coinsurance Preventive Benefit RX - Tier 1 / Tier 2 / Tier 3 RX - Specialty RX Mail Order - 90 Day Supply Available Available $150 $150 $10 / $40 / $60 $10 / $40 / $60 No Charge if In-Network No Charge if In-Network Member pays 40% AD Member pays 40% AD Member pays 20% AD Member pays 20% AD $3,000 / $6,000 $3,000 / $6,000 Fulfillment Fulfillment $1,000 / $2,000 $1,000 / $2,000 All Actively at Work Full Time Employees All Actively at Work Full Time Employees In-Network In-Network $1,000 PPO $1,000 PPO Non Grandfathered Non Grandfathered Current Renewal Medical BCBS of Arkansas BCBS of Arkansas Health Plan Comparison 2025 vs 2026 BROWN & BROWN | 6 Rate Tier Enrolled 2025 Total Premium 2026 Total Premium 2025 EE Contribution 2026 EE Contribution 2026 EE Increase 2025 ER Contribution 2026 ER Contribution 2026 ER Increase Employee/Employer Cost - Share % Employee Only 27 $930.42 $958.32 $237.16 $244.28 $7.12 $693.26 $714.04 $20.78 25.49%/74.51% Employee + Spouse 4 $2,028.76 $2,089.62 $765.86 $788.82 $22.96 $1,262.90 $1,300.80 $37.90 37.75%/62.25% Employe + Child(ren)1 $1,674.70 $1,724.94 $632.20 $651.16 $18.96 $1,042.50 $1,073.78 $31.28 37.75%/62.25% Family 1 $2,761.22 $2,844.06 $1,042.36 $1,073.62 $31.26 $1,718.86 $1,770.44 $51.58 37.75%/62.25% Total Monthly 33 $37,672.30 $38,802.12 $11,141.32 $11,475.62 $334.30 $26,530.98 $27,326.50 $795.52 Total Annual $452,067.60 $465,625.44 $133,695.84 $137,707.44 $4,011.60 $318,371.76 $327,918.00 $9,546.24 Total Premium Change $13,557.84 % Change 3.0% Rate Tier Enrolled 2025 Total Premium 2026 Total Premium 2025 EE Contribution 2026 EE Contribution 2026 EE Increase 2025 ER Contribution 2026 ER Contribution 2026 ER Increase Employee/Employer Cost - Share % Employee Only 336 $469.78 $479.98 $66.04 $67.48 $1.44 $403.74 $412.50 $8.76 14.06%/85.94% Employee + Spouse 113 $1,013.20 $1,035.22 $150.76 $154.04 $3.28 $862.44 $881.18 $18.74 14.88%/85.12% Employe + Child(ren)82 $767.52 $784.18 $114.20 $116.68 $2.48 $653.32 $667.50 $14.18 14.88%/85.12% Family 237 $1,422.80 $1,453.72 $211.70 $216.30 $4.60 $1,211.10 $1,237.42 $26.32 14.88%/85.12% Total Monthly 768 $672,477.92 $687,087.54 $98,762.62 $100,910.66 $2,148.04 $573,715.30 $586,176.88 $12,461.58 Total Annual $8,069,735.04 $8,245,050.48 $1,185,151.44 $1,210,927.92 $25,776.48 $6,884,583.60 $7,034,122.56 $149,538.96 Total Premium Change $175,315.44 % Change 2.2% Total $8,521,802.64 $8,710,675.92 Change from Current Premium $188,873.28 Change from Initial Renewal Offer -$66,711.12 PPO PLAN HDHP PLAN HDHP/HSA IRS 2026 BROWN & BROWN | 7 The IRS made changes to both HDHP deductibles and HSA contribution limits. •HDHP deductibles will be increasing to: •$3,400 from $3,300 for an individual •$6,800 from $6,600 for family •HSA contribution limits will be increasing to: •$4,400 from $4,300 for an individual •$8,750 from $8,550 for family HSA Contributions for HDHP Plan BROWN & BROWN | 8 Plan Tier City's Contribution (per payroll) City's contribution (per month) City's Contribution (annual) Employee's Maximum Annual Contribution* Current IRS Max Annual Contribution EE $43.75 $87.50 $1,050.00 $3,350.00 $4,400.00 ES $61.67 $123.34 $1,480.08 $7,269.92 $8,750.00 EC $78.75 $157.50 $1,890.00 $6,860.00 $8,750.00 Family $95.00 $190.00 $2,280.00 $6,470.00 $8,750.00 2026 HSA Contributions Single Dental BROWN & BROWN | 9 Benefit Comparison Eligibility Definition Individual / Family Deductible Annual Benefit Maximum Carry-Over Benefit Coverage Waiting Periods Out of Network Reimbursement / MPA Preventive & Diagnostic Care Benefit Preventive & Diagnostic Services Basic Care Benefit Major Care Benefit Endodontics Periodontics - Surgical Periodontics - Non-Surgical Orthodontia Benefit Orthodontia Eligibility Dependent Children / Full time student up to age Dependent Children to Age 19 Dependent Children to Age 19 Up to Age 26 Up to Age 26 50% after deductible 50% after deductible 50% - $1,500 (lifetime max)50% - $1,500 (lifetime max) 80% after deductible 80% after deductible 50% after deductible 50% after deductible 80% after deductible 80% after deductible 50% after deductible 50% after deductible 100%100% Exams, Cleanings, Fluoride, X-Rays, Sealants Exams, Cleanings, Fluoride, X-Rays, Sealants None None 90% / 70% / 40%90% / 70% / 40% $1,500 $1,500 $500 benefit/ $700 threshold / $1,250 max benefit $500 benefit/ $700 threshold / $1,250 max benefit All Actively at Work Full Time Employees All Actively at Work Full Time Employees $50 / $150 $50 / $150 PPO Plus In-Network In-Network Voluntary Dental CURRENT RENEWAL Arkansas BCBS Arkansas BCBS PPO Plus Dual Vision BROWN & BROWN | 10 Benefit Comparison Eligibility Definition Frequency of Service - Exam/Lenses/Frames Eye Exam Single Vision Lenses Bifocal Lenses Trifocal Lenses Frames Contact Lenses Exam - Standard Contact Lenses Exam - Specialty Contact Lenses - Elective (conventional or disposable) In Lieu of Frames & Lenses Contact Lenses - Medically Necessary Lasik Dependent Children / Full time student up to age Counts Tier Premium EE Cost Counts Tier Premium EE Cost Counts Tier Premium EE Cost Counts Tier Premium EE Cost 0 EE Only $7.72 $7.72 0 EE Only $7.72 $7.72 0 EE Only $6.00 $6.00 0 EE Only $6.00 $6.00 0 EE + Spouse $15.40 $15.40 0 EE + Spouse $15.40 $15.40 0 EE + Spouse $11.96 $11.96 0 EE + Spouse $11.96 $11.96 0 EE + Child(ren)$16.48 $16.48 0 EE + Child(ren)$16.48 $16.48 0 EE + Child(ren)$12.80 $12.80 0 EE + Child(ren)$12.80 $12.80 0 EE + Fam $26.34 $26.34 0 EE + Fam $26.34 $26.34 0 EE + Fam $20.46 $20.46 0 EE + Fam $20.46 $20.46 Rates Rates Table Rates Table Rates Table Rates Table Average discount is 15% off retail pricing Average discount is 15% off retail pricing Average discount is 15% off retail pricing Average discount is 15% off retail pricing Up to Age 26 Up to Age 26 Up to Age 26 Up to Age 26 $150 retail allowance $150 retail allowance $130 retail allowance $130 retail allowance $10 Copay $10 Copay $15 Copay $15 Copay Not to exceed $60 Not to exceed $60 Not to exceed $60 Not to exceed $60 $10 Copay $10 Copay $15 Copay $15 Copay $150 retail allowance $150 retail allowance $130 retail allowance $130 retail allowance $10 Copay $10 Copay $15 Copay $15 Copay $10 Copay $10 Copay $15 Copay $15 Copay 12 / 12 / 12 12 / 12 / 12 12 / 12 / 24 12 / 12 / 24 $10 Copay $10 Copay $10 Copay $10 Copay In-Network In-Network In-Network In-Network All Actively at Work Full Time Employees All Actively at Work Full Time Employees All Actively at Work Full Time Employees All Actively at Work Full Time Employees Arkansas BCBS Gold II Arkansas BCBS Silver II Arkansas BCBS Silver II VSP Network VSP Network VSP Network VSP Network Voluntary Vision CURRENT RENEWAL CURRENT RENEWAL Arkansas BCBS Gold II THANK YOU! Any solicitation or invitation to discuss insurance sales or servicing is being provided at the request of Brown & Brown Insurance Services, Inc.. Brown & Brown Insurance Services, Inc. only provides insurance related solicitations or services to insureds or insured risks in jurisdictions where it and its individual insurance professionals are properly licensed. © 2025 Brown & Brown. All rights reserved.