title
Authorization to ratify 2025 health insurance cost and the purchase of coverages for employee health insurance benefits for 2026 and 2027.
presenter
Presenter: Mary Howard, Chief Administrative & Resident Services Officer
end
Recommendation
The Operating Chairman of the Chicago Housing Authority (“CHA”) recommends that the CHA Board of Commissioners (“Board”) approves the allocation of funding for CHA’s employee health insurance benefits: (1) a 17.4% increase of $2,015,600 over the approved 2025 benefits amount of $11,822,805 for a new Option Year 2 total of $13,838,405; (2) a 16.7% increase of $2,040,167, over the approved 2026 benefits amount of $12,239,395, for a new Option Year 3 total of $14,279,562; and (3) an increase of $1,148,635 over the approved 2027 benefits amount of $12,851,365, for a new Option Year 4, final option year, total of $14,000,000.
Summary
|
YEAR |
APPROVED AMOUNT |
RECOMMENDED AMOUNT |
|
2023 (Base Term) |
$10,572,850.00 |
|
|
2024 (Option Year 1) |
$11,101,493.00 |
|
|
2025 (Option Year 2) |
$11,822,805.00 |
$13,838,405.00 |
|
2026 (Option Year 3) |
$12,239,395.00 |
$14,279,562.00 |
|
2027 (Option year 4) |
$12,851,365.00 |
$14,000,000.00 |
Background
Option Year 2: The 17.4% increase for 2025 in the amount of $2,015,600 is due to the unanticipated spike in health benefits and expanded personnel that were not in place when the 2025 budget was set in 2024.
Option Year 3: The 16.7% increase for 2026 in the amount of $2,040,167 reflects CHA’s current headcount, turnover, the rising cost of medical coverage, and benefit usage. The impact of rising cost can be seen in the increased medical premium of $12,686,095, which amount is offset by employee contributions of $849,677 (6.7%), resulting in the net actual cost to CHA of $11,836,418.
|
Coverage |
Recommended Insurer |
2026 Recommendations |
|
Medical |
Blue-Cross Blue Shield |
$12,686,095 |
|
Dental |
Blue-Cross Blue Shield |
$591,218 |
|
Vision |
Blue-Cross Blue Shield |
$57,990 |
|
Retiree & Separations: Medical, Dental |
Blue-Cross Blue Shield |
$160,000 |
|
Life and AD&D |
MetLife |
$229,821 |
|
Short-Term Disability |
MetLife |
$240,521 |
|
Long-Term Disability |
MetLife |
$81,571 |
|
Long-Term Care |
Unum |
$86,000 |
|
Flex Spending |
Ameriflex |
$26,225 |
|
Employee Assistance |
Perspectives |
$8,686 |
|
COBRA Administration |
Flexible Benefits |
$5,000 |
|
Health Savings Plan (administrative) |
Empower/Optum |
$6,435 |
|
Wellness Programs |
Various Providers |
$100,000 |
|
|
Total Premiums |
$14,279,562 |
The benefits that have impacted the 2026 cost are:
Blue Cross Blue Shield: Medical +13.8% and Dental +8% renewals
• The medical renewal of 13.8% is significantly down from last year’s renewal of 21.1%.
• The dental renewal this year is at 8% down from 24.8% last year.
MetLife: Vision 4% and Rate Pass for other Coverages
• Vision renewal is 4% same as prior year.
• Life insurance and AD&D, short-term and long-term disability, had no increase to renewal rates.
• Benefit usage; however, has driven up the number of claims, which has increased the overall cost.
Option Year 4; Final Option Year
• In anticipation of a change to the PPO plan and an increase of HDHP participants to offset increasing costs, we anticipate that the amount in 2027 will be in line with or less than 2026.
Respectfully Submitted:
______________________
Matthew Brewer
Operating Chairman