The FY27 plan year begins July 1, 2026 and I would like to make you aware of the changes that were approved by Mayor and Council for the new plan year, and changes in our medical/prescription, HRA and HSA administration, and wellness vendor. All changes were driven by continued increases in medical and prescription costs, coupled with our desire to continue offering choices in plan types and benefits to suit our diverse employees. My team and I met with the Benefits Committee, representing both labor union and non-represented employees, to develop my recommendations. To preserve the health of our plans, while providing excellent access to medical and dental benefits, I recommended changes that were then approved by Mayor and Council. Please review the plan changes so you can make informed decisions during this open enrollment period.

The City is excited to announce that we will be working with Blue Cross Blue Shield of Arizona (“AZ Blue”) as our medical/prescription, HRA and HSA administration, and wellness vendor, effective July 1, 2026. The change to AZ Blue brings a new plan structure that will replace the Network Plan. The new plan structure will be referred to as the “EPO In-Network Only” plan and includes nationwide coverage.

With the continued increases in medical and prescription costs, there are required plan design changes and rate changes to the EPO In-Network Only plan and High-Deductible Health Plan with Health Reimbursement Arrangement (“HDHP w/HRA”). You’ll note that there are no plan design changes or increases in employee premiums for the High-Deductible Health Plan with Health Savings Account (“HDHP w/HSA”).

As we prepare for this open-enrollment period, please note the following:

• Review the open enrollment booklet for information on AZ Blue and to understand the plan designs and rate changes.
• Attend an open enrollment meeting to learn about AZ Blue. Review and understand the changes and have the opportunity to ask any questions.
• As mentioned during open enrollment for FY26, I advised you that the City will phase out the HDHP w/HRA plan as of June 30, 2028. This will include restricting the HDHP w/HRA plan to employees and retirees currently enrolled through June 30, 2026. No new enrollments will be allowed during Open Enrollment, and new hires will not have the HDHP w/HRA plan option starting July 1, 2026.
• The City contribution of $1,500 Individual / $3,000 Family to HSA accounts will continue.
• Prepare to complete the positive enrollment for medical coverage, which is required if you want to continue medical coverage for you and your dependents in FY27.
• Coverage will be effective July 1, 2026.