Title:
Consider and take action on a resolution authorizing the renewal of the City's Cigna dental PPO administrative services and dental HMO coverage for the period October 1, 2026, through September 30, 2027 (Director of Human Resources and Civil Service)
Background:
Approval of this item will authorize the renewal of the City's dental PPO and HMO benefit plans with Cigna for the October 1, 2026, through September 30, 2027, plan year.
The City of League City currently offers dental coverage through Cigna under two funding arrangements. The dental PPO plan is self-insured, with Cigna Health and Life Insurance Company providing claims administration and network access services under an Administrative Services Only (ASO) agreement. The dental HMO plan is offered through a fully insured arrangement utilizing the Cigna Dental Care Access Plus network.
The dental PPO is an auto renewal, the Administrative Services Only (ASO) fee remains unchanged at $2.95 per enrolled employee per month, representing a 0% increase from the current plan year. Based on projected enrollment of 541 employees, annual administration and access fees are estimated at $19,151.
Cigna has provided renewal terms for the dental HMO 2026-2027 plan year. Cigna has proposed a 7.01% premium rate increase. Based on current enrollment of 92 employees, the estimated annual HMO premium is $25,913, compared with $24,215 for the current plan year. The renewal maintains the current P7XV0 Patient Charge Schedule and Dental Care Access Plus network. The proposed HMO rates are guaranteed for 12 months.
The FY2026 dental renewal was addressed through a renewal memorandum. Based on available renewal figures, estimated HMO premiums and PPO administration and access fees total $43,366 for FY2026 ($24,215 in HMO premiums and an estimated $19,151 in PPO fees) and $45,064 for FY2027 ($25,913 in HMO premiums and $19,151 in PPO fees). The combined estimated expenditure for FY2026 and FY2027 is $88,430, excluding self-insured PPO claims. Because the estimated expenditure exceeds $50,000, staff is bringing the FY2027 renewal to City Council for consideration and authorization.
The renewals would continue the City's existing dental benefit arrangements for the 2026-2027 plan year, subject to the final renewal agreements and applicable approvals.
Attachments:
1. Proposed Resolution
2. Cigna Dental Renewal Proposal - Effective October 1, 2026
3. Cigna Dental PPO Administrative Services Only Agreement - Effective October 1, 2024
FUNDING
{X} Expenses will be charged to the Employee Benefit Fund Dental Insurance Payment account #40301650-54651