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TO: Mayor John Laesch
FROM: Michele Clark, Chief Human Resource Officer
DATE: August 27, 2026
SUBJECT:
A Resolution Authorizing an Agreement with Blue Cross Blue Shield of Illinois (BCBSIL) for the Administration of Pre Medicare Retiree Group Health Insurance and Further Establishing Group Health Insurance Plan Rates for the period of January 1, 2027, through December 31, 2027
PURPOSE:
To authorize administrative services agreements with BCBSIL for employee group health and dental insurance and to establish the 2027 schedule of benefits and insurance premium rates for the City’s PPO, HMO, and Value HSA (HDHP) medical, dental and vision plans.
BACKGROUND:
The City of Aurora provides a self-funded health plan for active employees and Pre-Medicare retirees through Blue Cross Blue Shield of Illinois (BCBSIL). In 2025, the City transitioned the PPO and HDHP plans from Cigna to BCBSIL and converted the BCBSIL HMO plan into a self-funded arrangement. Pre-Medicare retirees could enroll in an HMO, PPO, or HDHP medical plan. Dental rates have remained unchanged since 2016.
DISCUSSION:
The proposed 2027 renewal includes a 15% premium increase for the PPO plan, a 20% premium increase for the Value HSA (HDHP) plan, and a 15% increase to the HMO base funding rate.
The City recommends renewing its agreements with BCBSIL and approving the proposed 2027 rates for the PPO, HMO, and Value HSA (HDHP) medical plans, as well as the dental and vision plans.
Effective January 1, 2027, retirees will no longer be permitted to enroll in the HDHP upon retirement. Members currently on the plan will have no impact and will be allowed to remain on the plan. There are no medical plan design changes other than an increase in the required family deductible for the Value HSA (HDHP) plan to $3,500, as required by Internal Revenue Service regulations.
Medical and prescription drug cost trends, claims experience, and the City’s funding requirements are the primary factors driving the proposed increases. Dental rates will increase by 10%; however, there will be no changes to the dental plan benefits for 2027.
The 2026 and 2027 Pre-Medicare retiree contribution sheets are attached.
IMPACT STATEMENT:
NA
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to City Council.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Establishing Health and Dental Insurance Monthly Rates of Contributions for Pre-Medicare Retirees Effective January 1, 2027, through December 31, 2027
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora provides self-funded group health, vision and dental insurance plans for eligible pre-Medicare retirees and their eligible dependents; and
WHEREAS, it has been determined that the Pre-Medicare retiree rates for health, vision and dental insurance premiums, set forth in Exhibits A-E attached hereto and made a part hereof, represent equitable and reasonable amounts for eligible retirees and their dependent participants in the City health plans)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the 2027 City of Aurora medical, vision and dental rates for eligible pre-Medicare retirees and their eligible dependents, set forth in the Exhibits A-E attached hereto and made a part hereof, are hereby adopted.