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A Resolution Approving the 2026 Employee Health, Dental, Vision, Life, Accidental Death and Dismemberment, Accident, ad 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 2026 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 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 2026 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, 2023, through July 31, 2025. Claims analysis and excess loss utilization, both for the Village organization, in addition to general volatility in the healthcare market at large, drove a large premium rate increase for the 2026 plan year. Preliminary projections with no changes to plan design or employer contributions were projected to increase total plan expenses by approximately 14.5% in 2026. For the 2026 plan year, staff propose increasing the excess loss coverage minimum from $130,000 per year to $150,000 per year. This will increase the Village’s liability for claims by $20,000 per claimant but decreases the annual stop loss premium by nearly 10%. Staff also propose several incremental plan design changes to reduce overall health insurance premiums for employees, bringing the total health insurance renewal down to a 9.5% increase for the 2026 plan year, which equates to an 8.9% increase to the PPO, a 9.5% increase to the HDHP, and a 12.6% increase to both HMO products.
The Village will continue to offer a PPO, High Deductible Health Plan (HDHP) with Health Savings Account, HMO Illinois (HMOI), and BlueAdvantage HMO (BAHMO) insurance plans for the 2026 plan year. To reduce the overall premium rate increase and to keep pace with medical inflation, the Village is making incremental plan design changes to the PPO by increasing the individual and family deductibles from $300/$600 to $500/$1000 and reducing the coinsurance from 90% to 80% and increasing the maximum out-of-pocket from $1400/$2400 to $1500/$3000. Additionally, the Village is increasing the HDHP deductibles from $1650/$3400 to $2000/$4000. There are no proposed plan design changes to the HMOI or BAHMO for 2026.
Optional Dental Insurance through Delta Dental: (see Exhibit A for premiums)
Premiums for optional dental insurance are paid 100% by the employee. Delta Dental is proposing no rate increases for the 2026 plan year.
Optional Vision Insurance through VSP: (See Exhibit A for premiums)
Premiums for optional vision insurance are paid 100% by the employee. The Village is in year two of a two-year rate guarantee with VSP through 1/1/2027. There are no rate increases for the 2026 plan year.
Employer-paid Life and AD&D Insurance plus Optional Life and AD&D through Mutual of Omaha:
The Village is in year two of a two-year rate guarantee with Mutual of Omaha through 1/1/2027. 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 2026 plan year.
Optional Worksite Benefits with Mutual of Omaha:
These optional worksite benefits include Critical Illness and Accident coverage. Premiums for these plans are paid 100% by the employee. The Village is in year two of a two-year rate lock with Mutual of Omaha through 1/1/2027. There are no rate increases for worksite benefits for the 2026 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. For the 2026 plan year, the health insurance fund remains healthy.
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 9.5% increase in employer contributions to the Health Insurance Fund is significant.
Alternatives
Alternative 1:
The Village could explore alternative proposals received during the renewal process.
Advantages:
• It is possible that a new health insurance carrier may be less expensive in 2026; however, introductory rates are often used to gain customers, and are followed in subsequent years with more significant rate increases.
Disadvantages:
• This delays the Village’s ability to conduct open enrollment
• Employees have a strong preference for BCBS coverage
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 (2026 Rates)
3. Blue Cross Blue Shield Benefit Program Application (BPA)
4. Preferred Provider Option (PPO) 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. Delta Dental Renewal Application