SPECIFIC STOP LOSS INSURANCE

The City of Tucson (“City”) is the second largest city in Arizona. The City provides police and fire services, parks and recreation, street maintenance, transportation, solid waste management, water and a broad range of administration, para-professional and professional municipal governmental activities and services.

The City is seeking to obtain specific stop loss insurance for its 4,508 covered employees and retirees (mostly pre-Medicare) for a July 1, 2026 effective date. Effective July 1, 2026, the City will be moving to Blue Cross Blue Shield of Arizona (“AZ Blue”) for its medical TPA/network and PBM. Currently, the City has a self-funded plan through Cigna that was placed on July 1, 2019. Prior to this time, the City was under an insured contract with Cigna since 2007. Plan paid medical and prescription drug claims were approximately $43.5 million in the most recent 12 months (thru March 2026).

Stop loss insurance will cover medical and prescription drug coverages. AZ Blue will provide medical TPA services, network administration, UR/UM, and PBM functions through OptumRx, their PBM partner.

Currently, the City offers three medical plans to employees and retirees: a Network plan (HMO like benefits and restricted to participants residing in Arizona), a qualified High Deductible Health Plan (HDHP) with Health Savings Account (HSA) and a HDHP with Health Reimbursement Arrangement (HRA) (follow the link below for the latest benefit booklets): https://tucsonaz.gov/benefits

Effective July 1, 2026, the City will continue to offer three medical plans to employees and retirees but intends to eliminate the HDHP with HRA plan by plan year 2027/2028. At this time the City does not know if and how the HDHP with HRA plan will be replaced. The three medical plans under AZ Blue are:

• EPO In-Network Only Plan – available Nationwide (different from current “Arizona Only” access)
• HDHP with HSA
• HDHP with HRA

Eligibility and contribution information may be found at: https://tucsonaz.gov/benefits

As medical and pharmacy costs continue to rise, the City has had to implement plan design changes and premium rate changes each plan year since 2022. Plan changes effective 7/1/2026 are outlined below.

EPO In-Network Only Plan:

Deductible Increase by $250/$500 ($1000/$2000)

MOOP Increase by $250/$500 ($6600/$13200)

Increase Coinsurance to 80%

ER Copay Increase to $500

PCP Copay Increase $50

Network: SPC Copay Increase to $70

Rx Copay Increase: $20/$60/$120/$250 2.5x mail

HDHP w/HRA Plan:

Eliminate HRA Contribution

HDHP w/HSA Plan:

No changes to plan design or City contribution to HSA accounts

NO PRE-BID/PROPOSAL CONFERENCE: The City is foregoing a Pre-Bid/Proposal conference for this solicitation. Prospective bidders/offerors are invited to contact the assigned Contract Officer with any questions, preferably within eight (8) days prior to the submittal due date. Ordinarily, the purpose of this conference is to clarify the contents of this solicitation in order to prevent any misunderstanding of the City's position. Any doubt as to the requirements of this solicitation or any apparent omission or discrepancy should be presented to the Contract Officer before the submittal due date. The City will then determine the appropriate action necessary, if any, and issue a written addendum to the solicitation. Oral statements or instructions shall not constitute an addendum to this solicitation. Questions should be entered into the Q&A section of this solicitation in the OpenGov system. The deadline for questions is 5/5/2026 at 2 pm Arizona time (MST).

The City's contracted benefits consultant, McGriff, a Marsh & McLennan Agency LLC company, will be assisting the City with this RFP process.