HARLINGEN — Health insurance costs might be gouging a chunk out of the city’s budget — again.
Later today, city commissioners are expected to consider approving a $6.7 million contract, including a $217,000 increase in employee health insurance premiums.
Blue-Cross Blue-Shield of Texas is proposing commissioners renew the employee group insurance contract that comes with a 4.4 percent increase over this year’s premium.
Last year, consultant Scott Gibbs offered the current $6.5 million contract that came without a renewal increase.
Every other year during the last four years, the city’s premium has jumped.
In 2017, the city’s premium climbed to $6.5 million from $6.2 million the year before.
“Health insurance costs continue to go up and we’ve been able to manage that to a certain degree,” City Manager Dan Serna said yesterday during a telephone interview.
Options could include selecting a less costly insurance plan.
However, Serna said the city’s plan offers good coverage.
“This increase will provide employees with a level of health insurance we think they deserve,” he said.
Serna said employees’ relatively good health has led to lower numbers of insurance claims, which has helped manage the rising cost of covering about 700 employees working from City Hall and WaterWorks to Valley International Airport and the Harlingen Public Housing Authority.
“Over the prior four years, we’ve done a good job of maintaining claims at a level that allowed us to renew with little or no increase,” Serna said.
Serna said the proposed 4.4-percent figure marks a relatively low increase compared with many group health insurance premiums in the market.
“A 4.4-percent increase compared to other increases is very good compared to what we’re seeing across the industry,” he said.
Serna said he would adjust the city’s $43 million general fund budget if commissioners approve the proposed contract.
“It will have an impact on the budget and we will work through that,” he said.
For coverage under the current policy, individual employees pay $414 a year, while family coverage costs $1,441.
The policy offers $1,500 deductibles for individual employees and $3,000 deductibles for families.
While primary care co-pays cost $25, prescription drug co-pays charge $15 for generic drugs and $45 for brand-name drugs.
In 2016, the city returned to Blue Cross-Blue Shield after four years.
The city had contracted with Valley Baptist Health Plans, which changed its name to Allegian in 2014, for health insurance from 2012 to 2015.