Edinburg — The Edinburg City Council on Aug. 4 voted to move the city’s employee health coverage from a fully insured arrangement to a self‑funded administrative services (ASO) plan administered by Blue Cross Blue Shield of Texas, add stop‑loss protection with Liberty Mutual and accept Blue Cross’s bundled pharmacy benefit credits.

The action followed a detailed presentation by ValleyRisk Consulting and questions from council members. Jonathan Sakulinski, senior consultant, told the council the analytical review showed the city could have retained prior years’ premium/claims differences under a self‑funded model. “We would have actually had, I believe it was, $781,000 back to the city,” Sakulinski said, describing the modeled difference for recent plan years.

Why it matters: moving to self‑funding shifts short‑term premium risk to the city but can reduce long‑term costs and give the city access to plan data and possible credits. Council approved the consultants’ recommendation to bundle Blue Cross’s pharmacy benefit manager (PBM) and take credits that the consultants said total roughly $1.24 million in the first year, producing an estimated net credit of about $636,000 after fixed fees.

Key details: ValleyRisk presented side‑by‑side cost comparisons that showed current fully insured pricing near $9.98 million. The consultants’ estimated annual cost for the recommended self‑funded program (including administrative fees, stop‑loss, PBM and other services) was about $9.088 million; consultants recommended budgeting $9.7 million to be conservative. The recommended stop‑loss structure from Liberty Mutual used a $125,000 specific deductible in the consultant’s summary.

Council action and related votes: Council approved Item A to award the group benefit RFP and adopt the self‑funded recommendation (motion carried). Council separately approved Item B to award stop‑loss insurance to Liberty Mutual (motion carried), rejected standalone pharmacy PBM bids in Item C (motion carried) and approved voluntary employee products in Item D (motion carried). City staff and consultants said the RFP wording encompassed both fully insured and self‑funded options, so a single award covered the chosen ASO/TPA and bundled PBM.

What officials and consultants said: Eric Avahi, director of human resources, introduced the item and ValleyRisk consultants led the presentation. Sakulinski said the self‑funded option “is a very strong offer” because of the PBM credits and the administrative structure. Roger Garza and Javier Leal (ValueRisk/consulting team members) answered technical questions about plan networks, stop‑loss mechanics and administrative fees. City Manager Myra Ayala said staff felt comfortable moving forward given the consultants’ analysis and recommended budgeting conservatively.

Discussion highlights and caveats: Council asked how existing patient care and scheduled procedures would be affected; consultants said there would be no interruption in care or waiting periods for current treatments under the recommended transition. Council also asked about retirees; the consultants and staff confirmed retiree coverage included 85 retirees, who would remain on city coverage until Medicare eligibility, with no change in policy.

Next steps: The council authorized the city manager to negotiate agreements consistent with the awards. Staff will finalize contract documents, implement enrollment and set up the claims funding account and stop‑loss placement. The presentation materials show additional possible cost controls (direct provider contracting, importation options for high‑cost drugs) for future consideration.

Ending: Council members praised the work done to solicit competitive proposals. The new program’s first plan year and detailed implementation timelines will be set in the negotiated contracts and communicated to employees prior to any coverage changes.