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Consider a memorandum/resolution awarding RFP 25-42 to Blue Cross and Blue Shield of Texas (BCBSTX), for an excess risk policy (stop loss insurance) for medical and pharmacy claims under the City health insurance plan, effective October 1, 2025, in the amount of $1,356,969.00.
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DATE: September 16, 2025
TO: Kent Cagle, City Manager
FROM: Kate McDaniel, Executive Director of Human Resources
SUBJECT: Award RFP 25-42 for an excess risk policy (stop loss insurance) for medical and pharmacy claims under the City health insurance plan with Blue Cross and Blue Shield of Texas
BACKGROUND AND FINDINGS:
On June 3, 2025, Council approved Blue Cross Blue Shield of Texas (BCBSTX) as the City's Group Employee Medical and Pharmaceutical benefit provider, effective October 1, 2025. The City must purchase stop-loss insurance in the event of high claims to support the self-insured health care and pharmaceutical plan in FY26.
Stop-loss insurance protects the City against catastrophic or unpredictable losses. The City of Killeen will protect its plan with both specific and aggregate stop-loss coverage. Specific Stop-loss protects the City against a high claim on any one individual. Aggregate stop-loss provides a ceiling on the dollar amount of expenses that the City would pay, in total, during a contract period.
In partnership with the City's Employee Benefits Consultant, Lockton Dunning, on July 28, 2025, the City initiated a Request for Proposal (RFP) for firms experienced in stop-loss insurance coverage for the City of Killeen employees and retirees. Staff received and reviewed a proposal from BCBSTX, ($1,356,969), the sole bidder. The review and evaluation of the proposal were based on product offerings, the reputation of the vendor, and cost savings for the City and the employees.
After a thorough analysis of the stop-loss insurance proposal and option, staff recommends entering into an agreement with BCBSTX for FY26 for a term of one year in the ...
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