REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 19, 2026
FROM
LEONARDO GONZALEZ, Director, Human Resources Department
SUBJECT
Title
Medical Premium Rates for Plan Year 2026-27
End
RECOMMENDATION(S)
Recommendation
1. Approve medical premium rates for Blue Shield of California for active employees, Consolidated Omnibus Budget Reconciliation Act participants, and their eligible dependents, for plan year 2026-27, as shown in Attachment A.
2. Approve medical premium rates for Kaiser Foundation Health Plan, Inc. for active employees, Consolidated Omnibus Budget Reconciliation Act participants, and their eligible dependents, for plan year 2026-27, 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 Discretionary General Funding (Net County Cost). There is no additional cost associated with the approval of this item as the increase to the County’s contribution to employee medical insurance premiums pursuant to ordinances, compensation plans, and negotiated Memoranda of Understanding with individual labor unions is not greater than what has already been approved by the Board of Supervisors (Board). Additionally, the County does not contribute to the cost of premiums for Consolidated Omnibus Budget Reconciliation Act (COBRA) participants.
BACKGROUND INFORMATION
In November 2025, the Human Resources Department (HR) began working with its contracted benefits consultant, the Segal Company (Segal), to conduct a comprehensive analysis of the medical plans and begin working with the Employee Benefits Advisory Committee (EBAC) to negotiate rates for the 2026-27 plan year. As part of this process, Blue Shield of California (Blue Shield) and Kaiser Foundation Health Plan, Inc. (Kaiser), conducted their own analysis of what premium rates should be for the 2026-27 plan year. Blue Shield indicated that a 16.10% rate increase would be needed. However, under the Blue Shield Contract No. 24-668, approved by the Board on July 23, 2024 (Item No. 33), a not-to-exceed rate cap of 8.9% was established. In accordance with Contract No. 24-668, Blue Shield limited the proposed rate increase to 8.9%, including the continuation of the rate buy-down of $500,000 from the wellness and discretionary allowance provided by Blue Shield for the 2026-27 plan year. Kaiser calculated a rate increase of 4.5% over current rates.
After the initial offers, HR and EBAC continued to negotiate with the carriers to lower their rates. After three months of diligent negotiations, Kaiser agreed to lower the increase to approximately 4.0%. Blue Shield did not make any concessions citing overall increases in healthcare costs and claims experience among the reasons for the approximate 8.9% rate increase.
Upon review and final completion of negotiations on premium rates for Blue Shield and Kaiser, HR and EBAC are recommending approval of the following premiums for the 2026-27 plan year:
Blue Shield:
An approximate 8.9% increase to the current premiums for Blue Shield Health Maintenance Organization (HMO) and Preferred Provider Organization plans, which includes applying $500,000 ($250,000 for wellness and $250,000 discretionary funding) of the $1,000,000 annual wellness contribution provided by Blue Shield to reduce the overall rate increase.
Kaiser:
• An approximate 4.0% increase to the current premiums for the Kaiser HMO plans.
• Kaiser does not provide a Wellness allowance.
Blue Shield’s and Kaiser’s rates are listed in Attachment A.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Jose A. Mendoza, Deputy County Counsel, 387-5455) on April 27, 2026; and County Finance and Administration (Garrett Baker, Administrative Analyst, 387-3077) on April 30, 2026.