AGENDA CAPTION:
Title
Consider approval of Resolution 2026-84R, approving an Interlocal Agreement with Pool Members, through the Texas Municipal League Intergovernmental Risk Pool, to acquire and access Group Critical Illness Coverage for qualifying retired firefighters and peace officers as required by House Bill 4144, passed in the 89th Texas Legislative session; authorizing the City Manager, or her designee, to execute said agreement and other documents necessary to acquire the coverage on behalf of the city; and declaring an effective date.
Body
Meeting date: May 19, 2026
Department: Human Resources
Amount & Source of Funding
Funds Required: $4,662 (Current estimate)
Account or Project Number (C = CIP funds): 30030260
Funds Available: Yes
Account Name: Health Insurance Fund
Fiscal Note:
Prior Council Action: Click or tap here to enter text.
City Council Strategic Initiative: [Please select from the dropdown menu below]
Choose an item.
N/A
N/A
Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☐ Arts and Culture - Choose an item.
☐ Economic Development - Choose an item.
☐ Environment & Resource Protection - Choose an item.
☐ Housing + Neighborhoods - Choose an item.
☐ Land Use + Community Design and Character - Choose an item.
☐ Parks & Public Spaces + Health, Safety & Wellness - Choose an item.
☐ Transportation - Choose an item.
☐ Core Services
☒ Not Applicable
Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
Choose an item.
Background Information:
During the 89th Texas Legislative Session, the Texas Legislature adopted House Bill 4144 (HB 4144), which became effective September 1, 2025. HB 4144 amended Chapter 607 of the Texas Government Code to require political subdivisions with fire departments or law enforcement agencies employing at least 50 firefighters or peace officers to provide a critical illness supplemental income benefit or comparable health benefit plan coverage for qualifying retired firefighters and peace officers.
Under HB 4144, eligible retirees who are diagnosed within three years of retirement with certain cancers, acute myocardial infarction (heart attack), or stroke conditions identified within Texas Government Code Sections 607.055 and 607.056 are entitled to receive either supplemental income benefits or comparable health benefit coverage. The legislation establishes the value of the benefit as the lesser of the retiree’s final annual salary or $100,000.
In response to the new statutory requirement, the Texas Municipal League Intergovernmental Risk Pool (TMLIRP), through participating pool members, developed a group critical illness coverage program to assist member entities in complying with HB 4144. The proposed Interlocal Agreement allows participating governmental entities, including the City of San Marcos, to access this coverage through a cooperative structure with TMLIRP acting solely as the initial holder of the coverage.
Funding for the required coverage will be incorporated within the City’s employee benefits and risk management budget allocations through the self-insurance fund. Participation through the TMLIRP program is anticipated to provide a more cost-effective and administratively efficient solution than independently procuring comparable coverage.
The proposed coverage is structured as a group critical illness insurance plan through MetLife, accessed through participating TMLIRP entities. Under the program, premiums are calculated based on age-banded rates per $1,000 of coverage. Current monthly premium rates range from approximately $0.06 per $1,000 of coverage for individuals under age 25 to approximately $5.54 per $1,000 of coverage for individuals age 85 and older.
The benefit amount for eligible retirees is established as the lesser of the retiree’s final annual earnings rounded to the next highest $1,000, or $100,000, as required under HB 4144. Eligible retired firefighters and peace officers who experience a qualifying diagnosis within three years of retirement may receive a lump-sum benefit under the coverage.
At this time, only two (2) retired firefighters and one (1) retired police officer have been identified as eligible for this benefit, which limits the anticipated first-year fiscal impact. Based on current eligibility, the estimated annual cost to the City is approximately $4,662 annually for the identified participants. Annual premium costs may fluctuate in future years depending on retiree eligibility, participation, and elected coverage amounts
Staff will continue coordinating with TMLIRP and the City’s benefits consultants to monitor enrollment, premium impacts, and any future legislative or administrative changes associated with the program.
Because the agreement includes an interlocal component between governmental entities, City Council approval is required prior to execution to secure the required coverage on behalf of the City.
Council Committee, Board/Commission Action:
Click or tap here to enter text.
Alternatives:
Click or tap here to enter text.
Recommendation:
Staff recommends approval of the resolution to execute the Interlocal Agreement with participating pool members through the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) for the acquisition and access of Group Critical Illness Coverage required under HB 4144.
Approval of the agreement will allow the City to comply with state law requirements while leveraging a collaborative risk-pool solution specifically developed for Texas local governments. Participation through TMLIRP provides an administratively efficient and cost-effective mechanism for the City to provide the required coverage to eligible retired firefighters and peace officers.
Staff further recommends approval because the agreement ensures the City remains compliant with statutory obligations established by HB 4144 while continuing to support the health and well-being of public safety personnel who have served the San Marcos community.