Title
Consider approving Resolution No. 2026-115 authorizing an Administrative Services Agreement with UMR, Inc. for medical plan administration services for three (3) years and increasing the City’s self-funded health plan budget by $600,000; and take appropriate action.
Body
REQUESTOR:
Human Resources Department
BACKGROUND:
The City of Farmers Branch recognizes that providing a competitive and comprehensive health insurance program is essential to attracting, retaining, and supporting a highly qualified workforce. Employee health benefits are a critical component of the City's total compensation strategy, promoting the well-being, productivity, and financial security of employees and their families. By offering access to quality healthcare coverage, the City demonstrates its commitment to employee wellness while ensuring its ability to recruit and retain the talented professionals necessary to deliver high-quality municipal services to the community.
The City of Farmers Branch provides health insurance benefits to eligible full-time employees through a self-funded health plan. In a self-funded plan, the City pays medical and pharmacy claims as they are incurred rather than purchasing a fully insured health plan from an insurance carrier at a fixed cost. This allows the City greater flexibility and control over cost strategies and plan design. To protect the City against catastrophic claims, stop-loss insurance is purchased to reimburse the City for claims that exceed specified thresholds.
Generally, every three years, the City works with its long-time insurance broker, McGriff Services (now a Marsh/McClellan company), to issue a Request for Proposal (RFP) to evaluate market offerings from a variety of carriers and to remain competitive in the employer space.
The RFP process was designed to evaluate vendors based on overall cost, program options, employee disruption, pharmacy management strategies, and long-term value to the City and its employees. The City received proposals from five medical plan administrators and six pharmacy benefit management vendors. Following the evaluation of the proposals, staff is proposing to retain medical plan administration services with our existing vendor, UMR.
DISCUSSION:
Approval of Resolution No. 2026-115 would authorize renewal of the existing administrative services agreement with UMR for administrative services related to the City’s self-funded employee medical plan and the updated Fee Schedule for a three-year period.
UMR provided the strongest overall proposal, offering the most competitive pricing, detailed cost-saving projections, and a comprehensive suite of member-focused programs. The proposed medical program is expected to generate savings for the City through a combination of reduced administrative costs, third-party administrator fees, and rate guarantees for a three-year period.
FISCAL IMPACT:
Budgeted Financial Impact of $600,000 as a proposed budget increase to the City’s self-funded health fund for FY2027. This amount has been planned and prepared for as part of the City’s comprehensive budget preparation process. The funds will share costs with both pharmacy claims and stop-loss insurance renewals throughout the year.
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2026-115 as presented.
2. I move to approve Resolution No. 2026-115, with modifications.
3. I move to table the issue for further study or take no action.
ATTACHMENT(S):
1. Resolution No. 2026-115
2. Presentation