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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: August 5, 2026
To: Honorable Mayor and City Council Members
From: Andrea E. Russell, Director of Human Resources
Department: Human Resources
Subject: Health Benefits Plan Year 2027 (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, approve the City's health benefit plans for plan year 2027 and authorize the City Manager to execute any agreements necessary to effectuate the medical, dental, vision, life, short and long-term disability, and other ancillary and voluntary plans that the City offers as part of its benefits package to employees.
City Manager's Comments
The City Manager recommends approval.
Executive Summary
The annual review for the City's Health Plan Benefits for the 2027 plan year was completed. The proposed plan reflects an overall 11.1% increase across all active employee and early retiree medical plans. Current medical plan offerings will remain in place for the 2027 plan year. Sufficient funding for increased premiums is included in the department’s 2026/2027 budget, Health & Life Insurance account.
Background
Each year, City staff and representatives from the employee bargaining units review the health benefit plans offered as part of the City's employee benefits package. This annual review includes medical, dental, vision, life insurance, short-term and long- term disability, and other ancillary and voluntary benefit plans. Providing comprehensive, competitive, and affordable health benefits is an important component of the City's efforts to recruit and retain a qualified workforce.
On July 23, 2026, Human Resources staff and the City's health benefits broker, Alliant, met with the Health Benefits Committee, which includes representatives from each of the City's employee bargaining units. During the meeting, the committee reviewed 3 4
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available plan options and associated premiums to evaluate benefit offerings for employees while maintaining comprehensive coverage.
Discussion
The renewal strategy maintains the City's current benefit portfolio while balancing rising healthcare costs. Most ancillary programs continue under multi-year rate guarantees, helping minimize the overall financial impact. The primary cost driver for 2027 remains the medical program renewal.
Medical plan providers will remain the same for the 2027 plan year. However, insurance premiums for medical options offered through Kaiser and Anthem will increase by 11.1%.
Several factors have contributed to these higher rates, including:
•Continued increases in healthcare utilization, including growth in chronic conditions, behavioral health services, and demand for healthcare access •Escalating provider costs and market dynamics. Healthcare systems continue to experience elevated labor, operational, and supply costs. Provider contract negotiations are producing annual cost increases ranging from 7% to 12%. •Rising prescription drug costs and expanded use of specialty medications.
Specialty pharmaceuticals now represent more than 50% of total pharmacy expenditures and continue to be one of the fastest-growing healthcare cost drivers
•Significant increases in GLP-1 medication utilization for both diabetes and weight management indications. To help manage long-term affordability and reduce renewal pressure on participating agencies, PRISMHealth has implemented a change to exclude coverage for non-diabetic GLP-1 medications under PPO plans effective for the 2027 plan year.
•Increased utilization of advanced medical technologies and high-cost treatments, including oncology therapies, transplant services, and emerging gene therapies.
•Continued growth in catastrophic claims activity, including a significant increase in claims exceeding $1 million
•Ongoing regulatory and legislative changes continue to expand coverage requirements and increase healthcare costs
SB 729 Fertility Benefits will be incorporated into the HMO medical plans. GLP-1 Coverage Changes will become effective January 1, 2027, including changes to coverage for nondiabetic weight-loss medications and updated clinical eligibility requirements.
Delta Dental will continue to provide dental insurance with a rate increase of 2.3%. 3 4
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VSP will continue to provide vision insurance with a rate pass until 2029.
Lincoln Financial will continue to provide basic and voluntary life insurance, short-term disability, long-term disability and Paid Family Leave with rates remaining unchanged through 2027. Wishbone and Total Pet will also continue to provide pet insurance with rates remaining unchanged through 2027.
The City of San Bernardino introduced the Colonial Life voluntary benefits program in 2015 and currently has 49 active policyholders. The voluntary Accident and Critical Illness plans through Colonial Life will renew at the current premium rates for the upcoming plan year.
Medical plan design options and employee out-of-pocket costs continue to meet the employer mandates Affordable Care Act (ACA) requirements. City contributions for employee groups are established by the provisions in their respective Memorandum of Understanding.
Strategic Targets and Goals
Approving the City's health benefits plan options for plan year 2027 aligns with Key Target 2b: Focused, Aligned Leadership and Unified Community by building a culture that attracts, retains, and motivates the highest quality of talent.
Fiscal Impact
Sufficient funding is included in the FY 2026/27 Adopted Budget.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, approve the City's health benefit plans for plan year 2027 and authorize the City Manager to execute any agreements necessary to effectuate the medical, dental, vision, life, short and long-term disability, and other ancillary and voluntary plans that the City offers as part of its benefits package to employees.
Attachments
Attachment 1 – 2027 Renewal Summary
Ward:
All Wards
Synopsis of Previous Council Actions:
November 19, 2025 The Mayor and City Council approved the City's health benefit plans for plan year 2026 and authorized the City Manager to execute any agreements necessary to effectuate the medical dental, vision, life, short and long-term disability and other ancillary and voluntary plans that the City offered as part of its benefits package to employees.
CC: Eric Levitt, City Manager