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A Resolution Approving the 2027 Employee Health, Dental, Vision, Life, Accidental Death and Dismemberment, Accident, and Critical Illness Insurance Providers’ Plan Designs and Premiums and Authorizing Their Execution
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Introduction
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This is an annual agenda item to approve various contract providers for the 2027 Employee Health, Dental, Vision, Life and Accidental Death and Dismemberment Insurance, Voluntary Worksite Benefits (Critical Illness and Accident), and Excess Loss Insurance with Blue Cross Blue Shield.
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Recommended Action
Adopt the Resolution
Prior Board Action
The Board has taken the following prior action(s):
• The Board adopted the health insurance renewal for 2026 on October 21, 2025.
• The Board adopted the health insurance renewal for 2025 on October 22, 2024.
• The Board adopted the health insurance renewal for 2024 on October 16, 2023
• The Board adopted the health insurance renewal for 2023 on October 17, 2022
Background
This is an annual agenda item to approve various contract providers for the Village’s health insurance program, which includes Health, Dental, Vision, Life, and Accidental Death and Dismemberment (AD&D) Insurance, Voluntary Worksite Benefits including Critical Illness and Accident, and Excess Loss coverage with Blue Cross Blue Shield (BCBS) of Illinois.
The proposed 2027 Employee Benefit plan includes the following:
Health Insurance, including Prescription Drug Coverage through Blue Cross Blue Shield of Illinois: (See Exhibit A for premiums)
Renewal projections from BCBS are based on a two (2)- year look-back at Village healthcare claims from August 1, 2024, through July 31, 2026. Claims analysis and excess loss utilization by the Village’s participants, in addition to general volatility in the healthcare market at large, drove a significant premium rate increase for the 2027 plan year. The Village’s broker took the health insurance program to market and received no alternative bidders for the health insurance renewal. Preliminary projections with no changes to plan design or employer contributions were initially projected to increase total plan expenses by approximately 29% in 2027. Ultimately for the 2027 plan year, staff proposed several plan design changes to reduce the increase to overall health insurance premiums for employees, bringing the total health insurance renewal down to a 17% increase over the 2026 plan.
The Village will continue to offer a High Deductible Health Plan (HDHP) with Health Savings Account, HMO Illinois (HMOI), and BlueAdvantage HMO (BAHMO) insurance plans for the 2027 plan year. The Village will replace its current PPO plan with a Blue Choice Options plan, which is a 2-tiered PPO network. This brings a significant reduction to the renewal rate for the Village and employees, with only limited potential provider disruption. Analysis shows that 95% of employees’ current healthcare providers fall within the Blue Choice Options Tier 1 which provides an enhanced benefit as compared to the current plan, with only 5% of employees’ current providers falling within Tier 2, which provides benefits at a reduced rate from Tier 1.
The Village has made additional plan design changes to the HDHP, HMOI and BAHMO plans to reduce the overall health insurance rate increase and continue to keep pace with medical inflation.
For the HDHP, individual/family deductibles are increasing from $2,000/$4,000 to $2,500/$5,000, and the max out-of-pocket is increasing from $4,000/$8,000 to $5,000/$10,000.
For the HMOI plan, the max out-of-pocket is increasing from $1,500/$3,000 to $2,000/$4,000, and copays are increasing from $30 to $50 for primary care, $50 to $100 for specialty care, $30 to $50 for urgent care, and $150 to $500 for ER visits that do not result in admission.
For the BAHMO plan, the max out-of-pocket is increasing from $1,500/$3,000 to $1,750/$3,500 and copays are increasing from $30 to $35 for primary care, $50 to $55 for specialty care, $30 to $35 for urgent care, and $150 to $500 for ER visits that do not result in admission.
Optional Dental Insurance: (see Exhibit A for premiums)
Premiums for optional dental insurance are paid 100% by the employee. For plan year 2027, the Village is transitioning from Delta Dental to Blue Cross Blue Shield Dental. Rates are unchanged from 2026.
Optional Vision Insurance: (See Exhibit A for premiums)
Premiums for optional vision insurance are paid 100% by the employee. For plan year 2027, the Village is transitioning to Blue Cross Blue Shield Vision. There are no rate increases for the 2027 plan year.
Employer-paid Life and AD&D Insurance plus Optional Life and AD&D:
The Village will maintain Mutual of Omaha for Basic Life/AD&D and Voluntary Life. There are no rate increases for the employer-paid Life and AD&D insurance for full-time employees and Voluntary Life and AD&D Insurance for the 2027 plan year.
Optional Worksite Benefits:
These optional worksite benefits include Critical Illness and Accident coverage. Premiums for these plans are paid 100% by the employee. The Village will maintain worksite benefits with Mutual of Omaha for the 2027 plan year. There are no rate increases for worksite benefits for the 2027 plan year.
Timing Considerations
As in years past, the Village aims to hold its annual Open Enrollment for active and retired employees the last week of October through the first week of November. This allows for a grace period, while still giving staff enough time to update elections and transition data to carriers in advance of the new plan year.
Budget Impact
The Village of Oak Park has a self-funded Health Insurance Fund. Revenues include employee, retiree, and COBRA health insurance premiums in addition to employer contributions. Payments for Health Insurance claims that fall below the excess loss coverage are paid through Account 6028.41080.101.520683.
Premiums equivalent rates are determined based on renewal projections and analysis.
Staffing Impact
There is no staffing impact associated with this item. The item aligns with the department’s core service delivery.
DEI Impact
There is no DEI impact associated with this item.
Community Input
There has been no community input given in relation to this item.
Staff Recommendation
Adopt the resolution.
Advantages:
• The proposed health insurance program remains a competitive benefit for employee recruitment and retention, with BCBS remaining a trusted insurance partner.
Disadvantages:
• A 17% increase in employer contributions to the Health Insurance Fund is significant.
Alternatives
Alternative 1:
The Village could explore additional plan design changes to further reduce the health insurance renewal rate increase.
Advantages:
• It is possible that additional plan design changes may bring additional incremental savings to the Village and employees.
Disadvantages:
• This delays the Village’s ability to conduct open enrollment
• There are multiple plan design changes already proposed. Employee benefits are a significant component of employees’ total compensation.
Anticipated Future Actions
There are no anticipated future actions in relation to this item.
Prepared By: Kira Tchang, Assistant Village Manager/HR Director
Reviewed By: Ahmad Zayyad, Deputy Village Manager
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Resolution
2. Exhibit A (2027 Rates)
3. Blue Cross Blue Shield Benefit Program Application (BPA)
4. Blue Choice Options (BCO) Pharmacy Benefit Manager (PBM) Application
5. Health Maintenance Organization (HMO) Pharmacy Benefit Manager (PBM) Application
6. Prescription (Rx) Rebate Addendum
7. PPO Stop Loss Application
8. HMO Stop Loss Application
9. IO Memo dated 9/25/26 - Health Insurance Renewal