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Consultants warn Fort Worth health fund reserves are near depletion; recommend rate, plan and vendor changes
Summary
Hub International told the Audit & Finance Committee the city’s health fund reserve has declined sharply and could fall to about $123,000 under current trends; consultants recommended a three-year strategy including funding-rate increases, plan design changes (including reexamining coverage for weight-loss medications), dependent audits and vendor RFPs to rebuild reserves.
Hub International consultants told the Audit & Finance Committee that Fort Worth’s health fund reserve has fallen from roughly $45 million in fiscal 2021 to an $8.9 million budgeted reserve for FY26 and that, using Hub’s claim projections, the reserve could drop to about $123,000 if corrective action is not taken.
Andrew Wager and Brent Wager of Hub International said key cost drivers include a sharp rise in per-capita medical and pharmacy spend: medical claims per capita rose roughly 12% year over year, pharmacy utilization increased substantially, and GLP‑1 weight-loss medications accounted for an outsized share of pharmacy cost (Hub reported approximately $5 million in six months and near $12 million on an annualized basis for weight-loss drugs).
Hub recommended a three-year strategic plan with near-term goals to stop reserve depletion (fiscal year 27 focus), mid-term goals to bend the cost curve and rebuild reserves, and longer-term sustainability by year three. Recommended steps included recalibrating funding rates, renegotiating contracts or issuing an RFP for third-party administrator/pharmacy benefit manager services, implementing cost-containment programs (high-claim monitoring, targeted surgical networks, redirecting ER utilization), conducting a dependent eligibility audit, and considering plan-design changes such as deductible or cost-sharing adjustments for medications considered cosmetic.
Kristen Smith, Human Resources Director, said the city already contributed roughly $6.7 million from the general fund and other funds to the health fund this fiscal year and that an additional transfer of about $6–7 million could be required to avoid a negative net position for FY26.
Committee members asked for clearer linkage between premium levels and recommended member-impact changes; Hub said proposals would include conservative projected savings and that some member impacts would require phased implementation and clear communication.
The committee requested follow-up updates; consultants and staff said they will return with more specific proposals and timelines.
