Health Insurance Premiums Rise for SISD Employees Following Failed Proposal
Employees of the Socorro Independent School District will face increased health insurance premiums and decreased take-home pay after voters recently turned down a tax proposal that could have provided the district with up to $49.2 million.
The district had intended to use $5 million from the expected revenue to support a health fund aimed at lowering employee health insurance costs. However, the proposal, known as VATRE (Voter Approved Tax Ratification Election), was narrowly rejected on Tuesday.
In response, the SISD Board of Education voted unanimously on Wednesday to proceed with a health plan that could raise premiums for some employees by amounts ranging from $45 to $650 per month, depending on their selected plan.
David Solis, the Chief Financial Officer of SISD, remarked, “This is a responsible decision for the district given its fragile fiscal position.”
Open enrollment begins on November 10 and continues through December 6, with new plans and fees effective in January. District officials indicated they would remind employees via phone and text about choosing their options.
Veronica Hernandez, President of the Socorro American Federation of Teachers, expressed that the board’s decision following the failed tax ratification was expected. “We knew there would be consequences. This is tough to accept,” she said.
With rising medical expenses and possible changes to the Affordable Care Act’s premium tax credit, premiums are anticipated to increase nationally.
The district had already been working on modifications to its healthcare offerings, which had been running a budget deficit for years, spending more on employee healthcare than what it could cover from out-of-pocket costs.
In recent years, the district managed to cover these costs through savings. However, after nearly a decade of overspending due to declining enrollment and stagnant state revenue, SISD has exhausted its reserves.
Selina Stiles, SISD’s chief human resources officer, noted that without the planned changes, the health fund could have faced a $25 million deficit.
Changes to the Health Plan
SISD will reduce its health plans from three to two and will raise copayments, deductibles, and out-of-pocket limits, aiming to cut $5.6 million from the health plan annually.
Although most employee health plans will see increased premiums, some employees—those without dependents enrolled in consumer-directed health plans—will not pay premiums. The plan, which pairs high deductible insurance with a Health Savings Account (HSA), will remain premium-free for these individuals.
The district’s health insurance will not cover GLP-1 drugs like Ozempic for weight loss, though it will continue coverage for diabetes patients, which is expected to provide one-time savings of $2.1 million.
SISD aims to incentivize employees to switch to a CDHP plan by increasing the district’s monthly contribution from $555 to $655 for that plan while other plans will retain the $555 contribution. Additionally, HSA contributions will rise from $800 to $1,200 annually.
The expected cost of these increased contributions to SISD will be around $1 million each year.
Rosie Perez, President of the West Texas Alliance, pointed out that the reduction in employee contributions after previous decisions in 2024 adds further strain on workers already facing higher premiums earlier this year. “Employees are having to make tough choices between paying dues and their health insurance,” she noted.
Despite the adjustments, Perez acknowledged that SISD offers relatively competitive health insurance when compared to other school districts in El Paso.
Hernandez stated that employee morale was already dwindling even before the failed Proposition A, lamenting, “They are trying to make ends meet. I’m concerned about the future.”
Broader Financial Challenges
Most changes made by the board could have been implemented regardless of the ballot proposal, but the $5 million boost would have eased premium increases for some, which now range from $80 to $500 monthly.
This proposal was part of a ballot that asked voters to approve a tax rate increase that would affect the district’s operational funding, counterbalanced by a corresponding decrease in the debt payment tax rate.
Even if the VATRE had passed, statewide expansion of school tax exemptions approved by Texas voters could have led to reduced school taxes for homeowners.
SISD hoped to utilize the additional revenue for rebuilding savings, replacing outdated student devices, and addressing air conditioning repairs.
Andrew Kim, a maintenance commissioner for the Texas Education Agency, emphasized that financial challenges persist regardless of the insurance vote. “We may need to look into borrowing to cover personnel costs, which could total around $30 million,” he stated.
SISD leadership intends to propose another tax ratification election in November 2026 to bolster future funding.
“We have to analyze these results and plan our next steps. This need remains, and it’s likely we’ll return to the voters,” said SISD Superintendent James Vasquez.
While TEA officials have indicated that the election outcome could influence their future, Kim clarified that financial stability is essential for the district’s ongoing viability.
“This issue is significant, but it’s not a withdrawal criterion. Our focus is on ensuring the district’s finances remain balanced and sustainable,” he added.
