The Stafford City Council on Oct. 1 approved the citys recommended health insurance providers and related plan changes for calendar year Jan. 12026 through Dec. 31, 2026, following a presentation by the citys benefits consultants and a period of council discussion.

City consultants told the council that an initial proposal from Blue Cross Blue Shield would have raised premiums by about 16 percent; after negotiations the city obtained a 7 percent increase and a $50,000 administrative credit. To reach that rate the consultants recommended plan-design changes including shifting some laboratory and imaging charges (Quest Diagnostics, LabCorp examples cited) out of an office copay and toward balance billing in certain circumstances. The council approved the recommended package in a recorded motion; councilors indicated support for the negotiated rate and the consultant recommendations. (Motion and second recorded; vote recorded as 6 yes.)

Why it matters: the decision sets employee cost-sharing and the citys 2025-26 benefits expenses, and council members pressed for clearer employee education about plan networks to limit unexpected out-of-pocket bills.

Details of the RFP and consultant recommendations

Staff said the RFP covered medical, dental, flexible spending accounts (FSA), and COBRA administration. Consultants reported the marketwide initial increase and then described the negotiation with Blue Cross Blue Shield that reduced the increase and delivered the administrative credit. To secure the lower rate the city agreed to certain plan-design changes: some services (notably certain labs and X-rays) that had previously been handled within a physician office copay may now be billed separately to members in some cases.

Council members and consultants discussed relative enrollee choices: the HMO plan had low current enrollment (consultants reported seven employees on the HMO), while most employees used PPO or high-deductible plans. Consultants and council members urged stronger employee outreach about the HMO network (noting Kelsey-Seybold participation) and how switching plans could affect both employee pocketbook and city costs.

Vendors and service changes

- Medical: recommended retention of Blue Cross Blue Shield after negotiation.
- Flexible spending accounts: staff recommended changing providers after employee complaints about customer service under the current vendor.
- COBRA administration: staff recommended switching from Higginbotham to a lower-cost administrator identified in the RFP.

Budget and benefits accounting

Staff described two benefit-accounting percentages used internally: a 35% rate used for budgeting salary/raises and a 55% figure used for total payroll-burden calculations (which includes paid time off, TMRS contributions, workerscompensation and related costs). The 35% number is used for planning increases; the larger figure is used when estimating total cost for new hires.

Council action and immediate follow-up

Council moved and approved the consultant-recommended package and vendor changes; the motion passed with six votes in favor. Several council members requested more detailed employee education sessions ahead of open enrollment to explain network differences and likely member cost exposure for labs and imaging.

Provenance: discussion and vote appear in the meeting packet and the public presentation (transcript segments).