TL;DR (generated · confidence: high)

The City's health insurance costs are rising faster than anticipated. After discovering 12.9–18.2% increases in FY 2024-25, the Mayor directed the Bureau of Human Resources, City leadership, and labor unions to develop a sustainable solution. For FY 2025-26, renewal rates are projected at 13.4% for LMBC and 16% for PPA, exceeding the 8% forecast. Council voting on revised benefit options is scheduled for April 2025.

Key points (each cites a PDF page):

In January 2024, BHR discovered employer-paid insurance costs would increase by 12.9% LMBC and 18.2% PPA, exceeding the City's budgeted 5% (p. 509)
Council approved a temporary solution using one-time funds and an employee surcharge for FY 2024-25 to maintain coverage levels (p. 509)
Mayor directed BHR, City leadership, and labor unions to develop a sustainable recommendation to address rising health insurance costs, with delivery by January 2025 (p. 509)
City forecasted an 8% increase in health insurance costs for FY 2025-26 based on national trends (p. 510)
Actual FY 2025-26 renewal rates are 13.4% for LMBC and 16% for PPA, exceeding the 8% forecast due to higher-than-average claim experience (p. 510)
BHR has worked with both LMBC and PPA to review cost-reduction options for benefit plans (p. 510)
Council voting on revised benefit options is scheduled for April 2025 for the FY 2025-26 plan year (p. 509)

📋 Bureau of Human Resources · Labor Management Benefits Committee (LMBC) · Portland Police Association (PPA) · Employer-paid health insurance benefits · 🏛️ Bureau of Human Resources

Continued-Collaboration-on-Future-Health-Insurance-Cost-Solutions-Budget-Note_1

Source: PDF pp. 509-510 · raw: 509 · 510

Breadcrumb: 3 city ops › Continued-Collaboration-on-Future-Health-Insurance-Cost-Solutions-Budget-Note_1

To: Ruth Levine, City Budget Office Director From: Tracy Warren, Human Resources Director Michelle Taylor, Human Resources Benefits Manager CC: Mike Jordan, City Administrator Deputy City Administrators Mayor & Council Date: February 19, 2025 Re: FY 2024-25 Adopted Budget Note Updates Budget Note Title Continued Collaboration on Future Health Insurance Cost Solutions Primary Service Area City Operations Due By Fall 2024 Tracy Warren Lead Michelle Taylor DCAs & CA Tracy Warren Staff to include Michelle Taylor Ruth Levine Aaron Rivera In Budget Concept? NA Budget Concept DP # NA Budget Note Full Text In January 2024, the Bureau of Human Resources (BHR) discovered that the City's employer- paid insurance costs would increase by 12.9% LMBC and 18.2% PPA, which was above the City's budgeted 5%. To maintain the same level of coverage for employees as offered in the previous fiscal year, Council approved a temporary solution that used one-time funds and an employee surcharge for FY 2024-25. Additionally, labor and BHR committed to developing a long-term solution that offers sustainable, solvent, and competitive benefits in the face of rising national trends of health insurance costs. As a result, the Mayor has directed BHR, City leadership, and labor unions to work together to develop a sustainable recommendation for the Council's approval. The recommendation should address the rising health insurance costs for the City's employer-paid benefits by January 2025. Deliverable The Mayor has directed BHR, City leadership, and labor unions to work together to develop a sustainable recommendation for the Council's approval. The recommendation should address the rising health insurance costs for the City's employer-paid benefits. Next Steps We will be working to present options to Council for voting in April 2025 for the 25-26 plan year. Page 12

Status Update The City forecasted for an 8% increase in health insurance cost for FY 25-26, this was based on the national health insurance cost trends. The City of Portland’s claim experience for our members is trending higher than the national average health insurance increases. This is driving a higher renewal rates for the City of Portland’s benefits plans. With renewal for FY 25-26 increasing by 13.4% for employees who are represented at the labor management benefits committee (health fund) and 16% for the Portland Police Association (PPA Fund). We’ve worked with both the LMBC and PPA to review options to reduce costs of the benefit plans. Status Update On track Page 13

Parent: 3 city ops · PDF: pp. 509-510