Insurance moves could save county more cash
The latest plan is to switch stop-loss insurance carriers, which will provide re-insurance coverage when a plan participant’s claim reaches $125,000 instead of $200,000.
Premiums will increase $566,000 to $986,000 in 2008, but if the 2007 health insurance situation plays out again, the county could save more than $300,000 by having a lower stop-loss amount.
This year, 18 people on the county’s insurance had claims over the $200,000 limit, totaling $3.5 million in claims. Eight of them were significantly over the limit.
The county’s stop-loss reimbursement was about $884,000 in 2007, but it could have increased to about $1.7 million had the new plan been in place.
“It seems like, at least in recent history, that we’ve been hitting these large shock losses, so lowering that self-retained limit, I think, makes sense,” County Administrator David Bretl said.
Also, the new coverage provided by ING reduces the county’s maximum exposure to insurance claims by more than $4.5 million. The most the county will pay for insurance in 2008 will be $19.2 million compared to $23.9 million this year.
The county could lose money if it has stop-loss claims less than the premium amount, but that could translate into a savings down the road because the total claims amount is significantly lower. Insurance companies bid on rates based on employee health and claim amounts.
“You don’t set out with the goal of, ‘I hope I recover more than my premiums for the year,’” Bretl said. “It is an insurance product. It would be ideal if we didn’t touch any of the limits. If we have good claims experience and nobody exceeds that $125,000 limit, that would be great news.
“But we know, based on recent history, that we’ll at least hit some of those limits.”
There is no assurance the county will receive the same offer from ING in 2009, but it was wise to at least get it for this upcoming year, said county board Chairwoman Nancy Russell.
The offer passed unanimously in both the human resources committee and the finance committee.
Health insurance at issue
Five employee unions have yet to ratify contracts for 2008-09. They include the county’s special education teachers and four AFSCME unions representing employees in the courthouse, public works department, health care center and human services.
The sheriff’s deputies and human services professional’s union already ratified contracts that included a change to health insurance benefits.
The two agreed to adopt a one-tier plan that has employees pay 10 percent of insurance premiums. That amount can be lowered to 5 percent if employees have health screenings and take steps to improve health.
The county budgeted about $17.6 million on health insurance for 2008 with the idea that all employee unions would agree to a new insurance benefits package. If none did, and the current plans were in place, the county would need to remove $1 million from other operating budgets to fully fund the insurance plan.
Bretl could not comment on the status of negotiations with the remaining unions.
He said the county is committed to providing the one-tier plan to the unions that ratified and non-represented employees.
If the new insurance plans aren’t a part of the remaining unions’ contracts, the county would look for cuts early in 2008.
“Our goal has to be to do it in a way that has as little public impact as possible,” he said. “That’s easier said than done.
“The majority of our budget is staffing. To say we’re going to take it out of equipment or by not buying stationary or turning the thermostat down is not going to do it.”