Agenda Item Wording:
title
PRISMHealth amended memorandum of understanding - Authorize the City Manager to execute the amended memorandum of understanding for the PRISMHealth Program.
body
Agenda Date: 09/08/2026
Prepared by: Andrew Guzman, Risk Manager, Andrew.Guzman@visalia.gov, (559) 713-4335; Shonna Oneal, Administrative Services Director, Shonna.Oneal@visalia.gov , (559) 713-4053
Department Recommendation: Staff recommends that the Visalia City Council authorize the City Manager to sign the amended memorandum of understanding for the continued participation in the PRISMHealth Program.
Summary:
The City of Visalia provides medical and prescription benefits to employees and retirees through its participation in the PRISMHealth Program (“Program”). The PRISMHealth Committee, which is comprised of representatives from Program members, approved amendments to the program memorandum of understanding (MOU) on March 26, 2026. The amendments modernize the MOU to reflect PRISMHealth’s transition to an independent self-funded program and align the governing document with the health program’s current operations. The MOU revisions clarify existing governance, administrative processes, and operational procedures.
To continue participation in the program, the City will need to sign and return the amended MOU.
Background Discussion:
The City of Visalia joined the program on January 1, 2005. The health program was originally organized by the California State Association of Counties (CSAC) to provide a self-funded health plan option for public agencies in California. The program, as a whole, was a member of the Self-Insured Schools of California (SISC) to provide protection to its membership in plan years where expenses exceeded the premium. In this arrangement, SISC retained the risk of the program.
The PRISMHealth Committee is a nine-member committee responsible for providing oversight and governance of the PRISMHealth program. Committee members are representatives of agencies participating in the PRISMHealth program . Committee members are nominated annually by participating member agencies, either through nomination by another member agency or through self-nomination. Nominees are reviewed by the PRISMHealth Committee Chair, who then provides their recommendation regarding appointments for final approval. Final approval of Committee members is made by the PRISM Joint Powers Authority Executive Committee. The PRISM Joint Powers Authority Executive Committee is a separate body with responsibility for oversight of the JPA as a whole. The PRISMHealth Committee, in contrast, is focused specifically on the administration, oversight, and financial performance of only the PRISMHealth program. This structure ensures that participating agencies have direct representation in decisions affecting the health program. In 2025, after several years of monitoring premiums paid to SISC in comparison with actual program expenses, the PRISMHealth Committee voted to transition PRISMHealth from SISC and operate the program as an independent self-funded health program. The effective date of PRISMHealth’s separation from SISC was October 1, 2025.
The MOU amendments serve to clarify the administration of the Program, outline financial accountability and program funding levels, and to improve readability and consistency of the document. These revisions are largely clarifying in nature and do not change the City’s existing practices. Significant amendments to the MOU include:
• Premium administration & financial accountability for late payments: The MOU amendments re-establish these program requirements, which are already in practice.
• Clarifies the administration of expected claims funding, incurred but not reported funding, reinsurance, administrative expenses, reserves, assessments when necessary, and PRISMHealth Committee-approved dividends or premium credits.
• Establishes that the program-designated benefits administration system is the official health plan enrollment system of record.
• Aligns the program with the PRISM Joint Powers Agreement
• Updates terminology to reflect current program operations
• Clarifies committee authority and member obligations
Fiscal Impact including annual maintenance and operating costs: There is no fiscal impact for this item.
Prior Council Action: January 2025 - Joined PRISMHealth (formerly CPEIA/EIA Health); June 2007 - Authorized execution of amended MOU; May 2008 - Authorized execution of amended MOU
Alternatives: To not approve the execution of the amended MOU, which is not recommended. If the City Council chooses not to approve the execution of the amended MOU, PRISMHealth will administratively remove the City of Visalia from the health program. This would require the City to secure replacement health coverage for all active employees and eligible retirees by January 1, 2027
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to execute the amended memorandum of understanding for the PRISMHealth Program.
Environmental Assessment Status: N/A
CEQA Review: N/A
Deadline for Action: 09/08/2026
Attachments: 1. Memorandum of Understanding - PRISMHealth Program; 2. Redlined version of PRISMHealth Memorandum of Understanding
Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Select all that apply.
|
□  Economic Vitality |
□  Organizational Excellence |
■  Fiscal Strength |
□  Infrastructure & Growth |
□  Quality of Life |