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Katy ISD health plan running multi-year deficits; trustees press for options as pharmacy costs surge

Katy Independent School District Board of Trustees · March 23, 2026
AI-Generated Content: All content on this page was generated by AI to highlight key points from the meeting. For complete details and context, we recommend watching the full video. so we can fix them.

Summary

Risk-management staff told the board that participation has fallen to about 61% and that pharmacy (specialty drugs) and large claims have driven a sharp increase in the health-fund deficit; the district reported administrative savings but trustees asked for TRS comparisons, clearer employee communications and options to support staff affordability.

Lance Nauman, Katy ISD's director of risk management, presented a semiannual update on the district's self-funded health plans and warned trustees that multi-year deficits have deepened since 2020. He said employee participation is roughly 61–62% (about 8,000 staff participants and roughly 13,000 total plan participants counting dependents) and that the district contributes $385 per employee per month (PEPM). "One of the biggest financial impacts you will see to a health plan are large losses," Nauman said, defining large losses as incidents greater than $75,000 and pointing to catastrophic conditions and specialty medications as…

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