Harlingen taps health insurance firm amid rising costs

Harlingen City Hall is pictured Thursday on Tyler Avenue on Jan. 7, 2022. (Denise Cathey/The Brownsville Herald)
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HARLINGEN — With health insurance premiums soaring, the city’s switching consultants, scrapping a Rio Grande Valley company after last year’s costs jumped 5% to cover more than 650 City Hall workers.

Now, officials are finalizing a contract after city commissioners selected McGriff Insurance Services, based in Dallas, deciding against renewing McAllen-based Valley Risk Consulting’s contract.

“We have not finalized the contract yet,” City Manager Gabriel Gonzalez said Wednesday, referring to McGriff’s contract. “We have had conference calls to begin the process but have not completed it.”

Last week, commissioners tapped McGriff, a firm with which officials had contracted two years ago, after considering proposals from Valley Risk and One Digital.

“I think it’s our expertise we bring to the table,” Scott Gibbs, a McGriff consultant, told commissioners during the May 5 meeting.

“We have the city’s interest at heart,” he said. “I’m very passionate about my clients. I’m always available for the city.”

During a presentation, Gibbs told commissioners the company will work to keep costs down.

“We know you guys are fighting for talent so what we try to do is protect your taxpayer dollars and provide your employees with the best benefit plan at the lowest cost,” he said. “We’d love to work with you guys again. We’d be honored.”

While contracting with the Harlingen school district, the company’s working with about 350 government entities across Texas, Gibbs said.

For two years, the city contracted with Valley Risk Consulting, which last year offered coverage through United Healthcare, which boosted its rates 4.9%, jumping costs by $389,519 to $8.17 million.

“With everything going up, you really didn’t save any money,” Daniel Hausbeck, a company consultant, told commissioners. “You saved without having a large percentage increase, so instead of having a 10% or a 15% increase, you only had a 5% increase.”

Last year, Valley Risk’s plan offered employees several options, with coverage starting at about $574 a year while ranging to as much as about $2,339 for family coverage.

At the time, officials had countered United Healthcare’s proposed 12.9% increase, agreeing to take a 5% hike amid soaring industry costs, while Commissioner Daniel Lopez questioned whether the company was “fleecing” the city.

In 2022, commissioners began working with Valley Risk after dropping McGriff, which had handled the city’s employee health plans for at least 10 years.

Since at least 2013, the city had contracted with McGriff, which in 2021 recommended commissioners select United Healthcare as the city’s insurance carrier, dropping Blue Cross-Blue Shield after five years.

That year, on McGriff’s recommendation, commissioners entered into a $5.39 million contract with United Healthcare, up $790,000, or 16.8%, over the year before.

Commissioners had agreed to drop Blue Cross-Blue Shield after it boosted its premium from $5 million to $6.14 million, an increase of $1.4 million.

Nearly every year, city officials have been facing climbing insurance premiums.

For five years, Blue Cross-Blue Shield served as the city’s medical insurance carrier.

In 2016, the city returned to Blue Cross-Blue Shield after contracting with other carriers for three years.

From 2012 to 2015, the city contracted with Valley Baptist Health Plans, which changed its name to Allegian in 2014, for its employees’ health insurance coverage.