Agenda Report
Fullerton City Council
MEETING DATE: SEPTEMBER 15, 2026
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: LAURA GIANETTI-MERCER, ACTING HUMAN RESOURCES DIRECTOR PREPARED BY: LAURA GIANETTI-MERCER, ACTING HUMAN RESOURCES DIRECTOR
CHRISTINE PILAPIL, HUMAN RESOURCES MANAGER I
SUBJECT: 2027 GROUP INSURANCE PLAN REPORT
SUMMARY
This report provides the 2027 renewal rates for the City Employee Group Insurance and Benefits programs which staff reviews annually to manage overall employer and employee costs. The 2027 plans would renew automatically on January 1, 2027.
PROPOSED MOTION
Receive and file 2027 Group Insurance Plan Renewal.
Approve and authorize City Manager, or designee, to execute any required documents and take actions necessary to implement and administer the 2027 Employee Group Insurance and Benefits programs.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
None.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
The City budgets employee group insurance and benefits programs within the Group Insurance Fund (Fund 66). Staff incorporated sufficient funds for the 2027 renewal rates for all premium plans in the Fiscal Year 2026-27 Adopted Budget.
DISCUSSION
The City of Fullerton offers a comprehensive benefits package including medical, dental, vision, life and disability to eligible active employees. Eligible retirees also have access to City-sponsored group medical, dental and vision plans. The City establishes contributions toward these benefits through the collective bargaining process and applicable City resolutions.
The Human Resources Department, in collaboration with the City benefits broker, the Baldwin Group (Baldwin) and the Medical Advisory Committee comprised of employees representing various bargaining units, annually reviews benefit offerings to ensure plan options remain competitive and provide an appropriate balance between employee and employer costs. Human Resources and Baldwin evaluate renewal rates, plan utilization, claims experience, benefit plan design and available alternatives. The review also considers potential changes that could improve the value and sustainability of the City benefit programs.
The City offers Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans through Kaiser Permanente (Kaiser) and Cigna Healthcare (Cigna).
The Cigna negotiated renewal represents a 6.9% increase, reduced from an initial 11.2%. proposed increase. Baldwin negotiated the reduced renewal rate based on City claims experience and renewal negotiations. Cigna based the renewal on medical and pharmacy claims experience between February 2025 and January 2026. The Kaiser renewal reflects a 10.9% increase. Kaiser recently changed its rating methodology to incorporate 24 months of claims experience, compared with 12 months in prior years. The increase is primarily attributable to increased utilization and higher medical costs, including the impact of high-cost claimants within the covered population.
The City offers dental benefits through Delta Dental, with both HMO and PPO plan options available. Dental rates would renew at a 2.0% combined increase for the HMO and PPO plans.
The City offers vision benefits through VSP, with renewal rates reflecting a 7.5% reduction from current rates.
The dental and vision plans perform favorably based on the most recent 12 months of claims experience, with stable claims experience supporting the favorable renewal results.
The Standard provides life, disability and ancillary benefits, including Short-Term Disability and Critical Illness insurance. The Standard initially proposed no change to existing life, disability and ancillary plans rates. The City secured a 34.3% reduction in rates through comprehensive marketing and competitive negotiations conducted by Baldwin. The negotiated reduction represents significant cost savings for the City and employees while maintaining the current coverage levels and benefits.
Premium rates for the City Employee Assistance Program administered by Cigna Behavioral Health, as well as COBRA and Flexible Spending Account administration fees through IGOE Administrative Services, would remain unchanged at the 2026 rates for 2027.
The City provides medical benefits to eligible non-regular employees in compliance with the federal Affordable Care Act (ACA). Eligible non-regular employees include temporary employees who work, on average, 30 or more hours per week and otherwise meet the applicable eligibility requirements. The monthly employee contribution totals $135.00, in accordance with Resolution No. 2024-031 and applicable ACA requirements.
Attachment 1 includes monthly premiums for all City-sponsored benefit plans for 2027. City contributions vary by bargaining group or employee unit, determined through collective bargaining.
Employees represented by the Fullerton Fire Management Association (FFMA) and Fullerton Firefighters’ Association (FFA) are eligible for health coverage through benefit plans offered under the Public Employees’ Medical & Hospital Care Act (PEMHCA), which governs the CalPERS Health Program. The CalPERS Board of Administration negotiates participating health plan rates and approved the 2027 rates at a 4.97% overall average health premium increase while continuing to improve care quality for members.
FFMA and FFA employees may also participate in other City-sponsored programs as required by their bargaining unit agreements.
Attachments:
Attachment 1 – City-Sponsored Program Premiums
cc: City Manager Eddie Manfro
2027 Group Insurance Plan Report
September 15, 2026 - Page 2