Temple City Council considers move to self insured health plan with UnitedHealthcare

The City of Temple held a joint meeting on August 14, 2025, to discuss the procurement of employee insurance policies and services for fiscal year 2026. The agenda included a detailed presentation on the transition from fully insured health plans to a self-insured model, which was a significant focus of the discussions.

The meeting began with a proposal for various insurance services, including medical and pharmacy plans from UnitedHealthcare, dental insurance from Blue Cross and Blue Shield of Texas, and vision insurance from Dearborn Life Insurance Company. The council also considered flexible spending accounts and health savings account services from Optum Financial.

Lance Pendley, Senior Vice President of Employee Benefits with McGriff Marsh McLennan Agency, provided an overview of the differences between self-insured and fully insured health plans. He explained that under a self-insured plan, the city would assume direct responsibility for medical claims, rather than paying fixed premiums to an insurance company. This shift is expected to provide the city with greater control over plan design and potential cost savings.

Pendley highlighted that self-insured plans are not regulated by the state of Texas but by federal guidelines under ERISA. He emphasized the financial advantages of self-insurance, including reduced overhead costs and improved cash flow, as claims would be paid as they arise rather than through pre-paid premiums.

The discussion also covered the importance of stop-loss insurance, which protects the city from catastrophic claims exceeding a predetermined amount. Pendley noted that the city would purchase both specific and aggregate stop-loss coverage to mitigate financial risks associated with high-cost medical claims.

The council was informed that transitioning to a self-insured model could result in estimated savings of approximately half a million dollars in the first year. Pendley mentioned that many municipalities that have made similar transitions have successfully built reserves and maintained stable premiums.

Following Pendley's presentation, the council was invited to ask questions and discuss the implications of the proposed changes. The meeting concluded with a consensus on the need for further consideration of the recommendations presented, particularly regarding the self-insured health plan.

Overall, the joint meeting underscored the city's commitment to exploring cost-effective health insurance solutions while ensuring comprehensive coverage for its employees. Further discussions and decisions are expected in upcoming council meetings as the city moves forward with these proposals.