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Consider a memorandum/resolution awarding RFP 27-11 to Blue Cross 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, 2026, in the amount of $1,509,582.
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DATE: September 15, 2026
TO: Kent Cagle, Interim City Manager
FROM: Kate McDaniel, Executive Director of Human Resources
SUBJECT: AWARD RFP 27-11 FOR AN EXCESS RISK POLICY (STOP-LOSS INSURANCE) FOR MEDICAL AND PHARMACY CLAIMS UNDER THE CITY HEALTH INSURANCE PLAN TO BCBSTX IN THE AMOUNT OF $1,509,582.
BACKGROUND AND FINDINGS:
On June 2, 2026, Council approved Blue Cross Blue Shield of Texas (BCBSTX) as the City’s Group medical and pharmaceutical benefit provider, effective October 1, 2026. The City must purchase stop-loss insurance in the event of high claims to support the self-insured health care and pharmaceutical plan in FY27.
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 provided 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 August 2, 2026, 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 two proposals. The review and evaluation of the proposals were based on product offerings, the reputation of the vendor, and cost.
After a thorough analysis of the stop-loss insurance proposals, staff recommend entering into an agreement with BCBSTX for FY27 for a term of one year in the amount of $1,509,582. Stop-loss insurance with BCBSTX provides cost-effective insurance for the Ci...
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