PILLAR: Fiscally Sound
AGENDA DATE: September 16, 2026
COUNCIL DISTRICT(S): Citywide
DEPARTMENT: Department of Human Resources
PRIORITY: Government Efficiency
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SUBJECT
Title
Authorize (1) approval of the 2027 Employee Health Benefits proposed plan design effective January 1, 2027; and (2) approval of the proposed health coverage plans for employees, retirees, and their families, including the discontinuation of the Blue Choice Copay Preferred Provider Organization Plan for Texas-based active employees and pre-65 retirees - Financing: Employee Benefits Fund ($257,985,595); Revenue: City Employee/Retiree Contributions ($88,597,179) (see Fiscal Information)
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BACKGROUND
The 2027 employee/retiree health benefits plan overview and contribution rates were previously reviewed by City Council on August 19, 2026.
The proposed 2027 program retains two medical plan choices: the Blue Essentials Primary Care Physician (PCP) Plan and the Blue Essentials Health Savings Account (HSA) Plan, both using the statewide Blue Essentials network. The Blue Choice Copay Preferred Provider Organization (PPO) plan will be discontinued for Texas-based active employees and pre-65 retirees effective January 1, 2027. The plan changes will reduce projected costs, improve care coordination, and strengthen early engagement with primary care.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On September 22, 2021, the City Council approval of the proposed plan design changes effective January 1, 2022 and approval of the proposed health coverage contribution and premium rates by Resolution No. 21-1694.
On September 28, 2022, the City Council approval of the proposed plan design changes effective January 1, 2023 and approval of the proposed health coverage contribution and premium rates by Resolution No. 22-1671.
On September 20, 2023, the City Council approval of the proposed plan design changes effective January 1, 2024 and approval of the proposed health coverage contribution and premium rates by Resolution No. 23-2396.
On September 25, 2024, the City Council approval of the proposed plan design changes effective January 1, 2025 and approval of the proposed health coverage contribution and premium rates by Resolution No. 24-2921.
On September 17, 2025, the City Council approval of the proposed plan design changes effective January 1, 2026 and approval of the proposed health coverage contribution and premium rates by Resolution No. 25-2761A.
FISCAL INFORMATION
Total cost based on the number of employee/retiree participants in the plan.
Employee Benefits Fund:
Total Expenditures $257,985,595
City Contributions $175,388,416
Employee Contributions $ 67,016,278
Retirees Contributions $ 21,580,901
Total Revenue $263,985,595