Nueces County renews self-funded health plan, tells outside agencies to assume stop-loss risk and approves 7.5% employee contribution increase

Nueces County Commissioners Court voted July 9 to renew its self-funded group health plan for the 2024-25 plan year, require outside entities that wish to remain on the county plan to sign updated agreements accepting their share of stop-loss risk, and adopt a 7.5% increase in employee premium contributions effective Oct. 1.

The action follows a workshop presentation from benefits staff and consultant McGriff showing four years of medical claims (Oct. 2019–Apr. 2024) of $2,502,040.62 and premiums of $3,351,387, which staff said produced a $849,346.38 surplus when pharmacy claims were excluded. Benefits staff cautioned the packet did not include prescription data and that adding pharmacy claims could materially change the picture. The court also heard a five-year "glide path" showing an anticipated deficit for the plan year ending Sept. 30, 2025 in the $2.5 million to $3.0 million range.

The court debated how to close that gap. Consultant scenarios presented to the court showed options such as increasing county contributions, modest employee contribution increases (the court chose a 7.5% employee increase as a compromise), or phasing additional county funding over several years. The consultant said the county had not been funding the plan to breakeven and that increasing contributions is required to avoid recurring deficits.

Commissioners also focused on the county's exposure from noncounty entities. One commissioner argued the county's liability for roughly 50 enrolled external employees (about 130 covered lives including dependents) was "not fair to our employees" and urged immediate notice to outside agencies that they must find alternative coverage if they cannot meet MOU terms. The court voted to allow outside entities to remain for one year only if they sign agreements that include paying their employer portion of premiums, their portion of the stop-loss premium, and assuming claims up to the stop-loss attachment point, which staff identified in the meeting packet at approximately $475,000.

Johnny Hipp, speaking for the hospital district, told the court the district uses the county plan because it lacks scale to obtain competitive proposals on its own and expressed willingness to negotiate MOU language and review historical claims to determine feasible cost-sharing. Several commissioners said the hospital district would be one of the few partners able to assume additional risk; others warned that smaller districts likely cannot cover catastrophic claims.

On motions and votes, the court: renewed the plan for 2024-25 and directed the purchasing agent to begin an RFP process for a broader plan redesign next year; passed a motion requiring outside entities to sign updated agreements accepting stop-loss responsibility for one year (to take effect Oct. 1); and approved a 7.5% employee premium contribution increase for the upcoming plan year. The motions passed in open court and were recorded as adopted.

Staff and legal counsel were directed to notify outside agencies immediately, prepare one-year MOUs for entities that elect to remain, and work through open-enrollment logistics so partner employees can be given time to decide whether their employer will sign the MOU. The court also directed staff to return with further information on pharmacy costs and other clarifying details as part of upcoming budget discussions and the RFP process.

The court recessed the workshop and continued with the regular agenda after the votes. The court emphasized that any continued participation by outside agencies is limited to one year under the new terms and that the county will revisit funding, plan design, and participant scope during the planned RFP and budget process.

Votes at a glance: - Renew county self-funded group health plan for 2024-25 and direct RFP for plan redesign: motion passed in open court. - Require outside entities that wish to continue participation to sign MOUs accepting employer premium, stop-loss premium share and claims up to the stop-loss (one-year arrangement, effective Oct. 1): motion passed in open court. - Approve 7.5% employee premium contribution increase (effective Oct. 1): motion passed in open court.

What comes next: staff will send notice to external agencies, prepare the one-year MOUs, and provide additional claims detail (including prescription costs) and RFP timelines to the court ahead of the fall procurement and the county's budget workshops.