Bee Cave staff warn of 20% health‑insurance renewal; propose modest deductible hike to blunt costs

City staff told the Bee Cave City Council on June 22 that the city’s group health plan with the Texas Health Benefits Pool faces a proposed 20% premium increase for fiscal year 2026–27 if the current plan design is left unchanged.

"So we received a 20% increase this year if we keep our plan the exact same," Winburn said while introducing carrier and broker representatives to the council. Staff presented a package of options designed to lower the citywide premium increase by shifting more cost to members: a proposed increase of the employee deductible from $750 to $1,000 and a rise in the family out‑of‑pocket maximum from $3,000 to $4,000.

Why it matters: staff and the carrier said Bee Cave’s claims experience and benefit richness are drivers of the steep renewal. A Texas Health representative said the city’s 24‑month loss ratio through May 2026 is 116.71% — well above the 85% breakeven target the pool uses — and noted several high‑cost claimants that contributed to the unfavorable experience. The carrier and broker emphasized that the pool spreads risk and that leaving it could expose the city to much larger premium spikes and loss of historical rating credits.

Brent, the brokerage representative, clarified a plan design point during Q&A: "The co pays are going to be prior to the deductible," he said, meaning routine copay services would not apply toward the deductible while hospitalization, imaging and similar services would.

Staff framed the proposed design changes as a middle‑of‑the‑road mitigation: according to the presentation, the proposed deductible/out‑of‑pocket adjustments would reduce the renewal from 20% to just below 17% (staff also ran a slightly larger increase scenario that produced about a 15%–16% rise but judged it more disruptive to employees). A council member asked whether the difference between the 20% and the proposed ~16% scenario — roughly $28,000 in annual cost to the city, as noted in the discussion — justified the disruption to employee benefits; councilors said they wanted more comparative market data and claims detail before deciding.

Next steps: staff said the carrier’s standard renewal deadline is July 1 to prepare systems for open enrollment beginning Aug. 1, and they can likely accommodate a short delay into early July. Council asked staff to return with additional benchmarking and claims detail and agreed to revisit the renewal at the July 14 meeting.

At this stage the city has not taken formal action; staff characterized the recommendation as a staff proposal to reduce the immediate premium increase while minimizing workforce disruption.