District 5 Councilman Ruben Gutierrez and Mayor Victor Trevino at a City Council meeting at the Joe A. Guerra Laredo Public Library on June 11, 2026.
Leaders in Laredo have approved a new health insurance plan for employees, seeking a balance that keeps costs manageable for workers while accepting a projected deficit in the city’s health fund.
The chosen plan, referred to as Option 4, raises employee contributions by 15% and is anticipated to result in approximately a $199,000 deficit for the city’s self-funded health insurance program. City managers had suggested another plan that could have produced an estimated surplus of $1.1 million, but it would have increased costs for some employees significantly.
This choice comes amid ongoing challenges for city officials regarding escalating health care costs and a potential $12.4 million shortfall in the health fund if no adjustments are made.
Ruben Gutierrez, District 5 Councilman, backed the approved option, asserting that the council aims to find a middle ground between ensuring insurance coverage and minimizing the financial burden on employees.
“Initially, a 32% overall increase was on the table. Today, we settled for 15%,” Gutierrez remarked.
With the approved plan, employees will still have access to various health plan options, including PPOs, HMOs, and high-deductible plans. Unlike some alternatives discussed, the adopted plan won’t remove options or create a significant premium gap between PPO and HMO coverage.
“We didn’t want it to be as burdensome as our employees have indicated,” Gutierrez commented.
City officials noted that managing this issue is becoming harder as healthcare costs rise nationwide. Council members looked at various factors, including contributions, deductibles, and the long-term viability of the city’s health insurance funds.
Laredo Mayor Dr. Victor Trevino commented on the sharp rise in healthcare prices lately, which has impacted both employees and employers.
“Healthcare costs are progressively becoming higher,” he said. “The more you try to achieve adequate compensation, the more the costs escalate.”
Dr. Trevino also raised concerns about the healthcare sector dealing with increasing costs related to medications, medical tests, and the requirements for insurance licensing.
“We want to support our employees,” he stated. “Yet, employees need to be aware that healthcare costs are on the rise.”
His background as a physician gives him a unique view on the situation, especially regarding the additional hurdles patients and providers face concerning drug expenses and insurance approvals.
“The healthcare field is in tough times,” he noted. “Many individuals are missing out on the medication they require, either due to out-of-pocket costs or lack of coverage.”
He pointed out that the pre-approval process for insurance is becoming increasingly difficult for healthcare providers, particularly when it comes to expensive tests and prescriptions.
“I think that’s something that should be determined by the doctor,” he added.
After several weeks of discussions and presentations by city staff, consultants, and Blue Cross Blue Shield representatives, the preferred options would create a surplus and help rebuild reserves while protecting the fund from future medical claims, officials noted.
However, some City Council members voiced concerns that raising the employee contributions could add to the burden on city workers, who are already dealing with increasing living expenses.
Gutierrez emphasized that the approved plan is aimed at alleviating pressure on employees while still ensuring they have insurance coverage.
“It’s about our city employees knowing we are advocating for them,” he explained. “We need to prioritize providing insurance for our employees.”
The changes will take effect in the next planning year, beginning on October 1, following the city’s annual public consultation process.
