Lakeway council renews employee health plan, rejects higher out-of-pocket option

The Lakeway City Council voted unanimously on July 13 to renew the city's current employee health plan rather than adopt a carrier option that would have raised employees'out-of-pocket maximums. Rebecca, a benefits representative from Gallagher, told the council that the vendor'proposed PPO option "keeps the deductible the same but it does increase the out of pocket to $9,000 versus the current out of pocket of $4,000," while lowering the overall carrier increase to 7.9 percent.

Council members pressed for the trade-offs between city savings and employee costs. The mayor summarized staff analysis that the alternative would yield roughly $34,000 in near-term budget savings while transferring the greater financial risk to about 15 employees and their families. One council member said the choice "really sounds like a bad idea" given the modest city savings and the disproportionate burden on a small group of employees. After discussion, Councilmember (8) moved to "move forward with the renewal as stated," the motion was seconded and the council approved the renewal unanimously. The council opened citizen participation on the item and received no comments before the vote.

The renewal decision affects both medical and related plan design choices; Gallagher staff also presented separately on ancillary benefits and a recommendation on voluntary and fully employer-paid products later on the agenda. The city indicated staff will continue to monitor plan performance and employee feedback as part of year'ahead benefits administration.