Do Harris County employees pay for health care? The FY27 benefits increase, investigated (2026-09-21)¶
Sources (all saved locally): FY27 Proposed Budget Vol. I v3 pp. 16-18 (Healthcare Costs, Health Insurance Fund Status, peer charts; renders in sources/official/renders/); FY27 Vol. I v1 (8/17/2026) p. 17 (the original proposal); FY26 Adopted Budget Vol. I pp. 18-19; FY27 Vol. II change tables ("Group Health Increase" lines); Appendix E benefit rates; Harris County Benefits & Wellness site (benefitsathctx.com/premiums), 2026 Employee Benefits Guide (p. 6, p. 13), 2027 Retiree Benefits Guide (pp. 10-11, 14, 22) in sources/official/benefits/; County Auditor ACFR FY2025 (Note 10 OPEB pp. 95-97; internal service fund statements pp. 225-226; Note 14 p. 103) and Monthly Financial Report June 30 2026 (pp. 30-31); Commissioners Court agenda Aug. 17 2026 item 4; Houston Public Media 9/17/2026; ABC13 9/2026; The Texan 9/9/2026; Texas Scorecard 9/9/2026; KTRH 9/9/2026; Houston Chronicle via Yahoo 9/9/2026.
1. Short answer¶
- Employee-only coverage is premium-free. On the Base PPO and the KelseyCare ACO an employee pays $0 in premiums; the county pays the full internal rate of $433.03 per pay period ($11,259 a year). The Plus PPO costs the employee $36.35 per pay period ($945 a year) against a county share of $559.37 ($14,544 a year).
- Employees do pay for dependents and for the richer plan. Family coverage costs the employee $193.84 (Base) or $290.77 (Plus) per pay period, $5,040 or $7,560 a year, roughly 20-22% of the total cost. Employees also pay a $600 individual / $1,800 family deductible on the Base plan (none on Plus or KelseyCare), copays of $20-$50, $300 for an ER visit, and out-of-pocket maximums of $6,350-$7,350 per person.
- In aggregate, employees and retirees pay about 15% of the plan. The county's own chart shows employer contributions of about $397M in 2026 against $71M from employees and retirees (85/15); the county's share has risen every year from 80% in 2020, and OMB notes the "industry standard" is 80/20.
- Retirees: a retiree under 65 pays $236.25 a month (Base) or $315 (Plus); Medicare-eligible retirees pay $0 for their own coverage on either the Base plan (secondary to Medicare) or the Humana Medicare Advantage PPO. Retirees eligible to retire before March 2011 pay $105 less. The county pays the rest: $1,137.22 a month for a non-Medicare Base retiree in 2027.
- So the claim "county employees don't pay for health care" is true for single coverage on the standard plan and for most retirees' own coverage, and false for dependents, the Plus plan, deductibles and copays. Compared with peers it is unusually generous: single-coverage PPO premiums are $190-$191 a month in Tarrant County and the City of Houston, $93 in Dallas County, $82 in Bexar County, $34 in Travis County and $0 in Harris County (county's own chart, FY27 Vol. I p. 18).
2. What the FY27 "benefits increase" is¶
| Item | FY25 | FY26 | FY27 adopted | Source |
|---|---|---|---|---|
| County health contribution per budgeted position | $19,182 | $20,228 (+5.5%) | $25,342 (+25.3%) | FY26 Vol. I p. 19; FY27 Vol. I p. 17; App. E |
| Increase in county contribution | - | +$19.6M | +$100M (+$89M General Fund) | same; Community Impact 9/17 |
| Medical claims | $449M (2025 forecast) | $498M (2026 proj.) | Health Insurance Fund expenses $577M | FY26 Vol. I p. 19; FY27 Vol. I p. 17 |
| Plan trend | - | 16% medical / 13% pharmacy (2025); 8% Q1 2026 | expected to stay elevated | FY27 Vol. I p. 16 |
| Health Insurance Fund result | revenue $448M + $25M reserves vs $473M expenses | revenue $477M + $46M reserves vs $531M; $8M deficit | revenue $485M vs $577M: $92M deficit before the $100M contribution increase ($102M / $110M with no program changes) | FY27 Vol. I p. 17; v1 p. 17 |
| Vol. II "Group Health Increase" lines (department-level change tables; revision 2) | - | - | $81.5M in the 81 General Fund departments; $87.5M in all 83 tables incl. Toll Road and Flood Control | data/vol2_change_items_aggregated.csv |
| Pension contribution rate | 15.1% | 15.1% | 14.50% budgeted (required 14.32%): saves $10.6M | FY27 Vol. I p. 18 |
| Revision 2 (2026-09-23): the $156.5M first reported here double-counted program-level and department-level change tables; the department-level lines total $81.5M in the 81 General Fund departments ($87.5M with the Toll Road and Flood Control). OMB's narrative figures are $89M for the General Fund and $100M for all funds (the cash the Health Insurance Fund needs); the budget book does not bridge the Volume II lines to those figures, so the difference is unexplained. |
3. The fund has run through its reserves¶
County chart (FY27 Vol. I p. 17, $M): FY23 revenue 403 + reserves 31 vs expenses 435; FY24 422 vs 416; FY25 448 + 25 vs 473; FY26 477 + 46 vs 531 (still $8M short); FY27 485 vs 577 ($92M short). Reserves drawn FY23-FY26: $102M, the figure the Chronicle reported. Audited figures agree. The Auditor's Health Insurance Management fund charged departments $434.6M in FY25 and paid $460.7M of claims plus $8.1M in claim-estimate changes; its net position fell from +$13.4M to -$11.7M at Sept. 30 2025 (ACFR Note 14 lists it among funds in deficit) and cash fell from $79.1M to $30.1M. Nine months into FY26 the fund had charged $340.3M and incurred $379.4M of claims; net position was -$31.3M at June 30 2026, cash $12.3M against $49.0M of incurred-but-not-reported claims. The "reserves" the county describes have, on the Auditor's books, already been exhausted.
4. Who pays what (plan year 2026; unchanged for 2027 by Court action)¶
Employee bi-weekly premiums (26 pay periods): employee pays / county pays / total. | Tier | Base PPO and KelseyCare ACO | Plus PPO | |---|---|---| | You only | $0 / $433.03 / $433.03 | $36.35 / $559.37 / $595.72 | | You + child(ren) | $109.03 / $636.54 / $745.57 | $181.72 / $835.01 / $1,016.73 | | You + spouse | $121.15 / $659.12 / $780.27 | $218.07 / $900.07 / $1,118.14 | | You + family | $193.84 / $793.18 / $987.02 | $290.77 / $1,044.78 / $1,335.55 | Premiums include medical, prescription, dental, vision, basic life and LTD. COBRA (full cost) is $957 a month for single Base coverage and $2,951.57 for a Plus family. Plan design: Base PPO deductible $600/$1,800, out-of-pocket max $7,350/$14,700, PCP $20, specialist $40, urgent care $50, ER $300; Plus PPO no deductible, OOP max $6,350/$12,700, PCP $15, specialist $30; KelseyCare ACO no deductible, in-network only. Retiree monthly premiums for 2027 (retiree pays / county pays): non-Medicare Base $236.25 / $1,137.22; non-Medicare Plus $315.00 / $1,567.30; Medicare-eligible on Base (secondary to Medicare) $0 / $1,137.22; Humana Medicare Advantage PPO $0 / $427.48; dependents $161.69-$630 extra. The county's retiree share rises 25% for 2027 (from $907.74 to $1,137.22 for the Base single tier) while the retiree's share is unchanged. Eligibility for the county contribution: hired before March 2007, age plus at least 10 years of service equal to 80 (or 65 with 10 years); hired after March 2007, age plus at least 20 years equal to 80 (or 65 with 15 years); four consecutive years on the plan before retirement.
5. Peer comparison (county's own charts)¶
- Monthly employee-only PPO premium: Tarrant $191; Houston $190; Bexar buy-up $112; Dallas $93; Bexar base $82; Harris buy-up $79; Travis $34; Harris base $0 (FY27 Vol. I p. 18).
- PPO individual deductible: Bexar base $1,500; Houston $850; Bexar buy-up $800; Travis $700; Harris base $600; Tarrant $500; Dallas $500; Harris buy-up $0.
- Employer health spend per employee per month (FY26 Vol. I p. 19, versus ~40 Texas public entities incl. Travis, Bexar, Houston, Dallas, Austin, San Antonio, El Paso, Fort Worth, Cy-Fair ISD, Austin ISD, ERS, TRS, UT Austin): Harris County Plus PPO single about $1,100 and Base about $800 against a median near $500; family about $2,100 / $1,400 against a median near $1,100. The county calls its benefits "generous" and says it "has absorbed nearly all the cost growth over the last 10 years."
6. What was proposed, and what the Court did¶
- Sept. 24, 2025 (FY26): contribution +$19.6M, no premium change; Employer Group Waiver Plan (Aetna SilverScript) for Medicare retirees effective Feb. 1, 2026, saving about $9M a year and cutting the retiree-health liability by about 12%; Humana Medicare Advantage PPO added.
- Aug. 17, 2026 (FY27 proposal, v1 p. 17): OMB recommended "moderate benefit changes ... including higher deductibles and employee premiums on the more lucrative medical plans," plus excluding low-use out-of-state pharmacies, Zerigo phototherapy and PrudentMed manufacturer assistance for high-cost drugs, and a $6M transfer from the Workers' Compensation Fund. With those, the county contribution would rise $90M and the per-position cost to $24,767 (+22%). Agenda item 4 that day adopted the 2027 premium rates, plan designs and the Aetna programs.
- Sept. 8, 2026: Commissioners Court "amended a prior version of the budget that had increases to premiums and deductibles for the Base and Plus plans," so "there will be no changes to premiums and deductibles for calendar year 2027." The change list books this as "Healthcare and Deductibles - Removed the healthcare and deductible savings opportunity ... (9.0)": $9M a year of savings forgone. Result: contribution +$100M, $25,342 per position (+25%). The Court also rejected requiring employees to buy into the base plan; the one change it kept affects five members and saves about $9M (drug-manufacturer assistance). Commissioner Garcia asked staff to model grandfathering current employees and charging premiums to new hires (staff's early estimate: $540K of FY27 savings).
- Sept. 17, 2026: the Court passed a motion directing an evaluation of the health plans and suggesting premium contributions for employees earning more than $130,000 (Houston Public Media). Commissioner Ellis said any change must "tread cautiously"; Commissioner Briones called the benefits a "sacred promise"; Commissioner Ramsey's office said the Court is "working continuously to not balance the budget on the backs of retirees and employees"; Bill King (Baker Institute): "They don't pay anything ... the Budget Officer proposed a relatively modest charge ... and the Commissioners voted it down."
7. Retiree health: the long-term bill¶
The county's Total OPEB liability (retiree health promised but not funded; no trust) was $3.91B at Sept. 30 2024 and $2.57B at Sept. 30 2025. The $1.34B drop is accounting, not cash: the Humana Medicare Advantage PPO (-$93M), the EGWP (-$899M) and a higher discount rate, 3.75% to 5.00% (-$574M). Each year the liability grows by $164M of service cost and $148M of interest; the county paid $90.6M of retiree claims out of pocket in FY25. At a 4% discount rate the liability would be $3.01B. Membership: 6,524 retirees and beneficiaries receiving benefits, 18,362 actives (9/30/2024). The FY25 audit reported a material weakness (finding 2025-002) because an incorrect EGWP assumption was used in the OPEB valuation.
8. Bottom line¶
The benefits increase is real and is the single largest new cost in FY27: +$100M of county money, a 25% jump in the per-position rate in one year on top of 5.5% the year before, with claims up 16% (medical) and 13% (pharmacy) in 2025. It is being paid entirely by taxpayers because the Court removed OMB's proposed premium and deductible increases. Employees are not "free-riding" on everything: dependents, the Plus plan and cost-sharing at the point of care are paid by employees, and employees plus retirees fund about 15% of the plan. But single coverage on the standard plan is free, most retirees' own coverage is free, and the county's own peer charts show no comparable Texas government matches that.