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Fort Worth: skyrocketing employee medical claims push proposal for higher city contributions, wellness changes
Summary
HR staff told the council health-claims costs have jumped and the city proposes a 7% increase in its contributions for health coverage for FY26, a possible 3% employee premium increase, continued coverage of GLP weight-loss medications, and wellness-program changes including optional wellness days in lieu of a cash payout.
Joanne Henson, an HR presenter at the Fort Worth budget work session, told council members the city's self-funded health plan has seen a sharp rise in high-cost claims and that staff are proposing changes to contributions and wellness incentives for fiscal year 2026.
Henson said the city carries stop-loss insurance with a $1 million per-claimant threshold; however, one plan participant currently has a lasered stop-loss that requires the city to pay the first $1,800,000 for that claimant. Henson said the city hit the stop-loss threshold twice in the first 10 years she worked there and five times in the last two years. She added that from 2023 to 2024 the city's claims costs increased by about $16 million and that the number of claims above $250,000 rose from 23 in 2022 to 31 in 2024.
To address rising costs, Henson said staff propose a 7% increase in the city's contributions for FY26 and recommended a 3% increase on the employee premium side; she said staff have modeled a 5% employee increase as well and that option would yield roughly $800,000 more for the plan. Henson also said the city is adding about 100 MedStar employees to its general plan population, which will raise enrollment and claims exposure.
Henson said the city continues to cover GLP (glucagon-like peptide) weight-loss medications and that staff plan to bring in three weight-management vendors to provide lifestyle support alongside drug therapy. "What we're hoping to do is that if we have people who work with lifestyle management…people will be able to get to a place where they'll be able to come off the GLP ones," Henson said.
On wellness incentives, Henson outlined a proposed change that would allow employees to choose either a $250 cash payout or two wellness days off. She said the current premium-incentive participation rate is 86%. Henson noted that offering wellness days instead of cash would reduce the city's liability because unused days would not carry over and estimated that if 50% of incentive participants chose the days, the city would save about $175,000.
Councilman Larsdorf asked whether lower-paid employees would prefer the cash option; Henson responded with participation-history data, saying the city previously offered days off through 2015 and then saw about 50% of participants choose the days over cash when the option was available. Henson said the city has roughly 10,000–11,000 employees covered now and that adding MedStar's 100 employees will increase that total.
No formal action was taken at the session; staff said they will continue to refine budget proposals and return with additional detail at upcoming sessions.
