City Council Meeting Date: October 7, 2025
To: Mayor and City Council
City Administrator Martig
From: Michelle Mahowald, Communications & Human Resources Director
Title
Consideration of 2026 Employee Benefits Renewal.
Body
Action Requested:
The Northfield City Council consider adopting a Motion approving rates and contributions for 2026 employee benefits coverage.
Summary Report:
The City of Northfield approved Gallagher Benefits Services as its broker for employee benefits in 2020. Gallagher Benefits Services Client Manager Katie Reger and Area Vice President Jessica Nikunen presented the renewal of health and other employee benefits to the employee benefits committee on September 10 and to the Council Employment Policy Committee on September 15. The employee benefits committee met again on September 23.
The following Blue Cross Blue Shield health insurance plans are recommended for the 2026 benefits renewal:
1. Continue offering the $500 deductible plan. Continue offering the $3,300/$6,400 embedded Heath Savings Account (HSA) plan. The deductibles will increase to $3,400/$6,800 in 2026. Both plans use the AWARE network (Northfield Hospital & Clinics, Mayo and metro hospitals included in network).
2. Replace the $1,000 deductible plan with a $5,000-$10,000 HSA using the High Value network (Northfield Hospital & Clinics are part of the network) Mayo is not in network.
Health Insurance History
In 2020, the City decided to switch from the Public Employees Insurance Plan (PEIP) to Blue Cross Blue Shield (BCBS). According to statute, the city must go out for proposal every 5 years for employee group benefits. In 2024, medical and dental quotes were requested from carriers. BCBS provided a final quote of 5% increase in premiums for 2025 and a 15% rate cap for 2026. The City received notice of a 15% premium increase in 2026 due to high claims.
Rate adjustments are based on group make-up, include age and area, employer contribution assumpti...
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