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Council approves employee benefits package with HRA to blunt premium spike
Summary
Council approved a benefits renewal that combines a plan change with a health-reimbursement arrangement (HRA); staff said the HRA keeps employee responsibility near prior levels while reducing the city's premium increase from a projected ~20% to an estimated 6–9%.
The Dripping Springs City Council approved an employee-benefits package and a professional-services agreement with the recommended broker after staff and consultant presentations on premium increases and mitigation options.
Nick Love of Brinson presented the renewal options and recommended "alternate 5" combined with a health reimbursement arrangement (HRA) to reduce the city and employee premium impacts. Love explained that while the listed deductible would increase from $1,500 to $3,000 under the recommended plan, the HRA would reimburse employees dollar-for-dollar above $1,500 up to the $3,000 deductible, effectively keeping employee out-of-pocket exposure at about $1,500. "Although it says it's $3,000, you're only responsible for the first $1,500," Love said when describing how the HRA would operate.
Staff estimated the city's reimbursement exposure at roughly $28,000 in a worst-case scenario and said incorporating the HRA would bring the city's overall premium increase into the 6–9% range rather than the larger increases originally proposed.
Council approved the recommended package, and staff said they will provide an open-enrollment guide and education materials to employees explaining the HRA and the plan-change details.
