City of San Angelo Worsens Health Insurance Benefit for 2026

San Angelo City Council approved moving forward with new insurance benefits for fiscal year 2026.  The former middle and high health insurance options have been eliminated.  

The low coverage option will be the new "preferred plan" with an even worse base plan and an associated health savings account contribution.  

The background packet makes this clear:

The new dual option maintains the current low plan and introduces a high deductible health plan (HDHP) with a health reimbursement account (HRA) to fund first dollar coverage. The high and medium plans would be discontinued. The premiums for both of the proposed plans would be at a premium increase compared to the current premiums for employees.

Add an unfunded liability that needs to be made up and the city/employees will need to pay more.

Although there is no projected increase in expense for this proposal, funding to cover the unfunded liability will be needed. There is an expected increase in premiums for active/U65 group.

A small plum for city workers is the new Health Reimbursement Account contribution for those on the new base plan, $750 for an individual and $1,500 for a family.  Assuming no usage of this account until a major healthcare event, it would take 8.8 years to accumulate the $6,600 annual out of pocket for an individual and a similar 8.8 years to build the $13,200 annual out of pocket for a family.

City Council has heard that economic development has the potential to shift the burden of taxes from residential real estate to corporate property, land, buildings and equipment.  That is if City Council doesn't abate that revenue away.  

That appeared to be the case in 2024 with retiree healthcare and a monster tax abatement on a battery farm.  The company requested an 85% tax abatement.  At the time I wrote:

It's rather Grinch like to save private equity investors millions, while foisting new health insurance deductibles on retired city workers.

The city did not enacted Council's direction because it violated federal law.  So they picked up the tab for retirees.  

Nearly a year later the city plans to foist new higher deductibles on most city workers, at least the ones picking the new base plan.  Everyone covered gets to pay more in premium, as well.  That's not a good deal for underpaid city employees.  

Update 10-24-25:  City Council increased health insurance premiums for retirees by $13 per month.  The vote was four ayes and two nays.  Stay tuned for future tax abatements....