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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 pr...
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