REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
October 20, 2026
FROM
LEONARDO GONZALEZ, Director, Human Resources Department
SUBJECT
Title
Medical Premium Rates for Retiree Plans
End
RECOMMENDATION(S)
Recommendation
1. Approve medical premium rates for Blue Shield of California for retired employees, retired Consolidated Omnibus Budget Reconciliation Act participants and their eligible dependents, effective January 1, 2027 through December 31, 2027, as shown in Attachment A.
2. Approve medical premium rates for Kaiser Foundation Health Plan, Inc. for retired employees, retired Consolidated Omnibus Budget Reconciliation Act participants and their eligible dependents, effective January 1, 2027 through December 31, 2027, as shown in Attachment A.
(Presenter: Leonardo Gonzalez, Director, 387-5570)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). There is no additional cost to the County associated with the approval of this item, as the County does not contribute to the cost of premiums for retired employees, retired Consolidated Omnibus Budget Reconciliation Act (COBRA) participants, and their eligible dependents.
BACKGROUND INFORMATION
Each year, the Human Resources Department (HR) and the Employee Benefits Advisory Committee (EBAC) work collaboratively with a contracted health and welfare consultant to review retiree plan utilization and negotiate medical premium rates for the retiree plans. The EBAC is a labor-management committee, composed of individuals representing employee bargaining units, management, and retirees. In June 2026, the County contracted with health and welfare consultant, The Segal Company (Western States) Inc. (Segal), to conduct a comprehensive analysis of data provided by Blue Shield of California (Blue Shield) and Kaiser Foundation Health Plan, Inc. (Kaiser) to determine the best medical rates for the upcoming retiree plan year.
In July 2026, Segal began negotiations with Blue Shield and Kaiser pertaining to the retiree medical plan premium rates for the 2027 benefit plan year.
Blue Shield initially proposed a rate increase of 8.9% for both the Medicare and non-Medicare plans, plus an additional 0.87% increase for the Senate Bill 125 Managed Care Organization (MCO) provider tax for the non-Medicare plans, resulting in a total increase of 9.77% for the non-Medicare plans. After negotiations with Segal and meeting with the EBAC, Blue Shield agreed to adjust the 2027 Medicare and non-Medicare premium rates to an approximate 6.90% increase and eliminate the 0.87% MCO provider tax for the non-Medicare plans. After reviewing Blue Shield’s final proposal, HR and the EBAC recommend approval of Blue Shield’s retiree medical premium rates for plan year 2027 as listed in Attachment A.
Kaiser initially proposed an approximate 5.99% rate increase for the non-Medicare plans and an approximate 1.40% rate reduction for Medicare plans. On August 13, 2026, the EBAC recommended approval of the proposed rate reduction for the Medicare plans and requested that Segal continue negotiations with Kaiser regarding the proposed increase for the non-Medicare plans. Following additional negotiations between Segal and Kaiser, Kaiser maintained its initial proposal for plan year 2027 non-Medicare rates. Given Kaiser’s firm position and the risk of service disruption to Kaiser members if not approved, HR and the EBAC recommend approval of the Kaiser retiree medical premium rates for plan year 2027 as listed in Attachment A.
Approval of this item establishes the Medicare and non-Medicare retiree medical premium rates for plan year 2027.
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Jose A. Mendoza, Deputy County Counsel, 387-5455) on September 29, 2026; and County Finance and Administration (Carl Lofton, Administrative Analyst, 387-5404) on September 29, 2026.