City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Stephanie Van Steyn, Director of Human Resources |
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Date: |
October 21, 2025 |
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Subject: |
Increase in City Contribution Toward Employee Medical Insurance Premiums and Stipend for Waiving Coverage |
Recommendation:
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Adopt a resolution approving budget appropriations for Fiscal Year 2025-26 to cover an increase of the City’s contribution toward employee medical insurance premiums and the stipend for employees who waive medical insurance coverage, effective January 1, 2026.
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Background:
The Memorandums of Understanding (MOUs) between the City and its respective bargaining units establish a fixed City contribution toward medical premiums and a stipend for employees who waive medical coverage. In addition, the City’s Medical Contribution Policy requires an annual evaluation of contribution rates, with any recommended changes presented to the City Council for consideration at a public meeting.
The City participates in the CalPERS Health Plan, with employees covered under the Region 1 plan options and premium rates. In July 2025, the CalPERS Board of Administration approved health plan premiums for the 2026 calendar year, which reflect significant increases across all plan options.
Because the City’s current contribution is fixed under the MOUs, these increases would otherwise be fully borne by employees. Approximately 68% of the City’s employees are enrolled in the Kaiser plan, where premiums are projected to increase between 26% and 34%. An increase to the City’s contribution is therefore recommended to maintain a competitive benefits package that supports employee recruitment and retention.
Human Resources reviewed employee plan participation data and collaborated with the Finance Department and the City Manager’s Office to determine an increase to the City’s medical premium contribution and the stipend for waiving medical insurance that is both affordable and practical. Below is the recommended increase to the City’s contribution:
Fiscal Impact:
The table below outlines the estimated monthly ongoing cost of the City’s increased premium contribution, along with the total additional cost for the second half of Fiscal Year 2025-26. The estimated total fiscal impact for Fiscal Year 2025-26 is $664,800, of which $277,428 is attributable to the General Fund.
Documents Attached:
1. Attachment 1 - Resolution
2. Attachment 2 - City-Wide Medical Contributions - Administrative Policy and Procedure Effective 01/01/2026