SUBJECT
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Authorizing the City Manager to approve an additional Retiree Health Insurance HMO Plan design and premium contribution structure, effective January 1, 2027, and authorizing Human Resources to conduct and administer a one-time Special Enrollment Period for currently enrolled retirees and their currently enrolled eligible dependents in accordance with the City’s Health Plan.
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VIVA LAREDO PLAN ALIGNMENT
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PREVIOUS COUNCIL ACTION
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BACKGROUND
During the FY 2026-2027 Budget Workshops and subsequent City Council meeting on June 15, 2026, the City Council discussed providing retirees with additional health insurance options that would offer more affordable coverage while maintaining access to comprehensive healthcare benefits. During the June 15 meeting, the Council directed staff to return with alternative retiree premium rates, including the addition of a Health Maintenance Organization (HMO) plan option for consideration.
In response to that direction, the Health & Benefits Division, in collaboration with the City's benefits consultant, evaluated retiree plan options and developed an additional HMO plan.
Currently, eligible retirees are offered a Preferred Provider Organization (PPO) plan only. The proposed HMO plan would provide retirees with an additional medical plan choice at a lower monthly premium than the PPO plan, allowing retirees to select the option that best meets their healthcare needs and financial circumstances.
Consistent with the City's existing retiree eligibility provisions, enrollment in the proposed HMO plan will be limited to retirees and their currently enrolled eligible dependents. Retirees will not be permitted to add new dependents after retirement, as the proposal maintains the City's current retiree eligibility rules. If approved, the additional retiree health insurance plan design and premium contribution structure will become effective January 1, 2027.
COMMITTEE RECOMMENDATION
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STAFF RECOMMENDATION
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Staff recommends approval of item as presented
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Fiscal Impact
Fiscal Year: FY 26-27
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Change Order: Exceeds 25% Y/N: Click or tap here to enter text.
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