City of Anaheim
CITY COUNCIL AGENDA REPORT
HUMAN RESOURCES DEPARTMENT
DATE: AUGUST 20, 2024
FROM: HUMAN RESOURCES DEPARTMENT
SUBJECT: 2025 HEALTH AND WELFARE PLAN CARRIERS AND RATES ATTACHMENT (Y/N): YES ITEM # 08
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion, approve the 2025 Health and Welfare Plan Carriers and Rates as listed on Attachment “A” and authorize the Human Resources Director, or designee, to enter into and execute all required agreements as well as take any and all actions necessary to implement and administer the agreements.
DISCUSSION:
The City of Anaheim (City) provides a comprehensive health and welfare program covering medical, dental, vision, wellness, and life and disability coverage for eligible active employees, as well as access to retiree medical and dental group coverage. Each year, the City reviews its health and welfare benefits to determine the best plan options, associated rates, and to manage overall employee/employer costs and employee satisfaction. This review is accomplished by Human Resources staff in concert with the City’s insurance broker and the Anaheim Health Council, an advisory body comprised of city employees representing each bargaining unit.
The City offers two medical provider options to active employees: Kaiser and Blue Shield.
The medical plan with the highest City employee enrollment is the Kaiser HMO plan.
Kaiser projects the renewal increase at approximately 9.9%, which is based on high claims utilization over the last two years. Noteworthy, 2025 renewal rates are slightly lower than the 12% increase experienced in 2024.
201 S. Anaheim Blvd.
Suite #501
Anaheim, CA 92805
Tel: (714) 765-5111
Fax: (714) 765-5215
www.anaheim.net
In addition to the Kaiser plan, City employees have two alternate HMO options provided by Blue Shield as well as two Blue Shield PPO options. The City successfully negotiated a 5% average renewal increase for the 2025 Blue Shield plans, down from Blue Shield's initial proposed increase of 12%. These increases are driven by medical/prescription trends and claims experience, including significant inpatient hospitalizations and pharmacy claims. City renewal increases are comparable with those experienced by other employers throughout California as a result of upward rate trends and inflation in the healthcare industry.
Despite the challenges posed by new federally mandated enhancements under the Inflation Reduction Act, which have driven higher-than-usual increases for Medicare Advantage
2025 Health and Welfare Plan Carriers and Rates
August 20, 2024
plans like Kaiser Senior Advantage, Humana, UnitedHealthcare, and Blue Shield Medicare PPO and HMO, the City was able to effectively mitigate the impact on overall costs. The City successfully negotiated a more favorable outcome for retiree medical renewals in 2025, with an average increase of 8% across all plans—a significant reduction from the 13% average increase in 2024.
The remaining health and welfare plans including dental insurance, group life insurance, disability, wellness, Flexible Spending Account (FSA), Health Savings Account (HSA), Consolidated Omnibus Budget Reconciliation Act (COBRA) programs, and the City’s Employee Assistance Program (REACH) remain at the 2024 rates with no changes for 2025.
IMPACT ON BUDGET:
Employee Health and Welfare Programs are budgeted in the Employee Benefits Fund and sufficient funds have been allocated in the fiscal year 2024/25 budget.
Respectfully submitted,
Linda N. Andal
Human Resources Director
Attachment:
1. Health & Welfare Plan Carriers and Rates – 2025