Primary Department: Management and Budget
Primary Department Head/Elected Official: Daniel Ramos
Secondary Department: Human Resources and Talent
Secondary Department Head/Elected Official: Sakita Douglas
Regular or Supplemental RCA: Regular RCA
Type of Request: Financial Authorization
Project ID (if applicable): N/A
Vendor/Entity Legal Name (if applicable): N/A
MWBE Contracted Goal (if applicable): N/A
MWBE Current Participation (if applicable): N/A
Justification for 0% MWBE Participation Goal: N/A - Goal not applicable to request
Grant Indirect Costs Rate (if applicable): N/A
Justification for 0% Grant Indirect Costs Rate (if applicable): N/A - Not a grant item
Request Summary (Agenda Caption):
title
Request for approval to adopt health and related benefit premium rates for employees and retirees for the 2026 plan year including a salary-based premium structure for employees.
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Background and Discussion:
The proposed benefit premium rates for the plan year beginning January 1, 2026 are attached for approval. It is recommended that the premiums charged to retirees remain the same for plan year 2026 and that employee premiums change to a 3-tier structure based on annual salary as follows:
1. Less than $65,000
2. Between $65,000 and $99,999.99
3. $100,000 and greater
If approved, Human Resources and Talent (HRT) will coordinate with Universal Services (US) on implementation of the salary-based premium structure. With open enrollment scheduled for October 2025, the new premium structure may be implemented after January 1st depending on the effort required by US for Peoplesoft program modifications.
Expected Impact:
Healthcare costs in the U.S. continue to significantly outpace general inflation and several factors point towards a substantial increase in the county’s medical costs in 2026. The recommended premiums would generate an additional $15M in annual revenue to the Health Insurance Fund based on current enrollment. Revenue projections will change if there is substantial plan migration (i.e., employees changing from the Plus plan to the Base plan).
There will be no impact to retirees since their health premiums are recommended to remain the same. The impact to employees will range from $0 to $142.80 per paycheck depending on the salary of the employee and the plan they choose. The KelseyCare plan would remain a free option for employees with self-only coverage regardless of their salary. It should be noted that employee health premiums have only increased once over the last nine years when a modest 5% increase was approved effective March 1, 2022; however, 33% of employees did not receive an increase because they were enrolled in the Base plan with self-only coverage.
Alternative Options:
Commissioners Court could choose not to increase employee premiums in 2026, but the proposed flat rate charged to department budgets for FY26 would need to be increased, which would impact other county initiatives.
County Strategic Plan Goal: N/A
County Strategic Plan Objective: N/A
Justice/Safety Initiative (Goal 1): N/A
Infrastructure Initiative (Goal 2): N/A
Economy Initiative (Goal 3): N/A
Health Initiative (Goal 4): N/A
Climate/Resilience Initiative (Goal 5): N/A
Housing Initiative (Goal 6): N/A
Additional notes related to the Strategic Plan:
Prior Court Action (if any):
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Precinct(s): Countywide
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Fiscal and Personnel Summary |
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Anticipated Court Date: 8/14/2025
Anticipated Implementation Date (if different from Court date): 1/1/2026
Emergency/Disaster Recovery Note: Not an emergency, disaster, or ARPA related item
Contact(s) name, title, department: Sarah Acosta, Director of Benefits & Wellness, Human Resources and Talent; Shain Carrizal, Deputy Executive Director of Risk Management, Office of Management and Budget
Attachments (if applicable): 2026 Health Premium Rates