What Dallas Is Changing in Its 2027 Employee Health Plan

The City of Dallas is preparing to narrow its employer-sponsored health insurance lineup as part of the City Manager’s proposed budget. If adopted, the changes would take effect in January 2027: the current PPO plan would be discontinued, while the two existing Blue Cross Blue Shield plans—an HSA plan and a PCP plan—would remain.

The PCP plan is built around coordinated care, with a primary care physician who knows an employee’s health history and helps guide referrals and treatment. The HSA plan offers lower premiums and includes a health savings account, giving members another way to set aside funds for eligible health care expenses.

City officials said many workers are already enrolled in the two continuing plans. For people currently in the PPO, roughly 90% of the providers in that network are expected to remain available through the remaining options. Before open enrollment, the benefits team plans in-person and virtual information sessions to explain the options and answer questions for employees and retirees.

The move is framed as a response to sharply rising employer-sponsored health insurance premiums nationwide. Without adjustments, the city says, a growing share of its resources would go to health care costs instead of essential services, employee compensation, and staffing. The city said it will keep evaluating benefit options through the coming year, with attention to serving employee needs and maintaining the program’s long-term sustainability.

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Why Dallas Is Moving From a PPO to HSA and PCP Coverage

Budget Pressure Is the Driver, Not Just Plan Design

The city is explicit that the change responds to sharply higher employer-sponsored health insurance premiums across the country. Because health care costs can grow faster than the revenue that funds city services, Dallas is trying to slow that spending before it displaces pay increases, staffing or core public services. In that context, dropping the broad PPO is a structural change to the benefit offering, but the stated goal is sustainability rather than a straightforward reduction in employee benefits.

HSA and PCP Are Different Models That Shift Trade-Offs

The two continuing plans do not simply mirror the departing PPO. The HSA plan uses lower premiums and a health savings account to give members more direct control over eligible medical expenses, but that can mean more responsibility for setting aside funds. The PCP plan routes care through a primary care physician who coordinates referrals and treatment, which can improve coordination but may feel more managed than a PPO. For employees and retirees, the right choice will depend on their health needs, how much they value lower premiums, and how comfortable they are with stricter care management.

The 90% Network Figure Signals Continuity, Not a Guarantee

Dallas has told PPO members that roughly 90% of the providers in the current PPO network are expected to be available through the remaining plans. That is a meaningful signal for continuity, but it is not a hard commitment: the list can change during final negotiations, and the remaining 10% may include specialists or facilities that matter to particular households. The information sessions before open enrollment are therefore likely to carry more weight than the headline percentage for people with established medical relationships.

What Dallas Employees and Retirees Should Do Before Open Enrollment

For City of Dallas employees and retirees affected by the proposed January 2027 changes:

  • If you are enrolled in the PPO, check whether your current doctors and facilities are expected to be available under the HSA or PCP plan; the city’s estimate is that about 90% of PPO-network providers will remain, not 100%.
  • Attend one of the in-person or virtual information sessions the benefits team will hold before open enrollment to compare plan rules and ask questions specific to your household.
  • When deciding between the remaining plans, weigh the HSA plan’s lower premiums and health savings account against the PCP plan’s coordinated care model and referral process through a primary care physician.
  • Treat the January 2027 effective date as a planning timeline, but wait for final budget approval and open enrollment materials before making enrollment changes.