By PETE BANDA
Special to the NEWS
At a time when healthcare is one of the most prevalent topics in America, many local entities are struggling to stay above water with their respective health care plans.
The City of San Benito, however, has been thriving over the last few years since switching from a fully funded plan to a self-funded one. That move, coupled with a few other savvy adjustments have left the Resaca City with a $1 million excess in its employee benefit fund.
According to an agent with Lonestar Insurance, the company who handles the medical plan for the City, San Benito is one of the few municipalities in the area with such a large surplus. Ruben Garza has been watching San Benito’s account grow since its switch to the self-funded route back in 2017. While Garza touts the City’s move as brilliant, at least one commissioner is wary of the long-term benefits of having a self-funded health care plan.
“There are a lot of benefits to the self-funded plan and the fact that we do have a $1 million surplus in the account shows that, but I personally believe we are exposing ourselves to long term risk being self-funded,” said mayor Pro-Temp Pete Galvan. “The account is currently earning 5.7% interest as well so there are a lot of factors that go into having such a successful account.”
According to Garza, the difference between a fully-funded healthcare plan and a self-funded one is that a fully-funded plan wouldn’t allow the City to take full advantage of having less claims on its plan.
“A fully-funded plan requires you to pay a set premium every month and it doesn’t matter if your claims come out more or less for the year, you still pay the same amount,” explained Garza. “In a fully-funded health plan, if you end up paying $2 million in premiums and your claims come out to $1 million, the provider pockets that extra money.
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