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TO: Mayor John Laesch
FROM: Elizabeth Coronado Abrego, Director of Human Resources
DATE: August 27, 2025
SUBJECT:
A Resolution Authorizing Agreement for Administrative Services with Blue Cross Blue Shield of Illinois(BCBSIL) for HMO, PPO and Value HSA(HDHP) Group Health, and Stop Loss Plan Administration for period January 1, 2026 through December 31, 2026.
PURPOSE:
To authorize an agreement for administrative services with Blue Cross Blue Shield of Illinois for the City's HMO, PPO and Value HSA(HDHP) health insurance plans and stop loss insurance coverage.
BACKGROUND:
The City of Aurora purchases stop loss protection from Blue Cross Blue Shield of Illinois so that one large claim does not disrupt the health plan's budget. The current Individual Stop Loss level is $325,000 per claimant. Once a claimant's cost exceed $325,000 during the plan year BCBSIL pays the claim not the city's self-insured account. The city has had a $325,000 ISL deductible for over 10 years yet treatment cost continues to rise resulting in increasing premium cost.
The Stop Loss is required to be with BCBSIL on the HMO, thus if the Stop Loss was marketed in year 2 of the BCBSIL plan, this would allow BCBSIL to change the three year commitment/guarantees provided under the 2025 plan change. The Stop Loss renewal is in line with the overall insurance market for 2026.
DISCUSSION:
BCBSIL renewal for the Individual Stop Loss (ISL) is 23.9% for an estimate annual premium of $2,246,601 for the HMO, PPO and HDHP plans. The city can reduce the renewal to a 3.7% increase, an estimated annual premium of $1,880,869, by increasing the ISL to $375,000. This will result in a $365,732 savings. Increasing the ISL to $375,000 will result in the city being responsible for claims between $0 to $375,000 instead of $0 to $325,000. Based on historical data below, the city will, on average, benefit by approximately $165,000 annually when factoring the increase in claim expense against the savings i...
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