Sullivan County running the numbers on employee health insurance

J. H. Osborne • Oct 9, 2007 at 12:00 AM

BLOUNTVILLE — The bottom line is Sullivan County and its employees will be paying more for employee health insurance beginning Jan. 1.

But the Sullivan County Commission’s Insurance Committee, and insurance brokers who advise the county, are looking at ways to shift more of the increased cost to employees and less of it to the county.

Things being considered to reduce potential rate increases include a reduction of benefits, upping the share employees pay for monthly premiums, and charging a “surcharge” to employees who want insurance for their spouses.

Employees might also be offered another option, called a High Deductible Health Plan (HDHP). Employees who choose to participate — if such an option becomes a reality — could actually see their current premium payments decrease for 2008. Brokers advising the committee said the option is a good deal for people who are either very healthy or very sick.

As presented to the committee, a HDHP option could provide savings to the county, which could be passed on to employees through Health Savings Account funding — with the county depositing money in a special account for each employee for use in health care spending.

According to information presented to the committee Monday:

•For “silver” plan coverage, currently through CIGNA, employees now pay 10.7 percent of monthly premium costs, and the county pays the rest as an employee benefit.

•CIGNA has offered a renewal rate that increases premiums by 35 percent, based on decreased benefits. The company was asked last month by the Insurance Committee to propose benefit adjustments that would keep the increase to 35 percent. Earlier rate offers, from CIGNA and other insurance providers, to continue the current level of benefits had run as much as 70 percent higher.

•Potential benefit adjustments from CIGNA’s 35 percent increase proposal include: an increased co-pay, from $150 to $200, per emergency room visit; a change in the prescription co-pay, from $10/$20/$35 to $10/$20/$50; an increase in deductibles, from $300 to $500 for individuals and from $750 to $1,000 for families; an increase in co-pay for visits to specialists, from $30 to $40; and an increase in the maximum out of pocket, from $1,300 to $2,000 for individuals and from $2,500 to $4,000 for families.

•An option “on the table” is to increase the 10.7 percent employees now pay toward the total premium to 20 percent.

•An example of how much that change could cost an employee: for family coverage, the current $91.14 paid monthly by an employee would increase to $121.86 if the 10.7 percent share is left in place, but would increase to $227.76 if employees are required to pay 20 percent of premiums — and would jump to $311.10 per month if the spouse surcharge is added.

•The projected cost to county government decreases as the potential cost to employees increases. If the county were to allow employees to continue to pay the same dollar amount they’re paying now, the county would need to fund about $1.6 million to cover the 35 percent increase in health insurance costs for 2008. If the 10.7 percent share is left in place, the county will need to cover about $1.425 million of the new costs. If employees begin paying 20 percent of the premium costs, the county will need to cover about $827,000 of the new costs. And if the 20 percent is combined with the spousal surcharge, the county will need to cover about $388,000 of the new costs.

Insurance Committee members said employee health insurance costs have been kept at pretty much the same level for five years.

“We’re at the time, we’re just going to have to bite the bullet,” said Commissioner Sam Jones, chairman of the committee.

Commissioner Joe Herron said he regrets the increase is coming so soon on the heels of a 5.25 percent pay raise for employees — leaving an image of the county giving with one hand and taking away with the other.

“I wish there was another option,” Herron said.

He later offered a couple of points for “out of the box” discussion: Simply divide up what the county now spends on employee health insurance among employees and let them buy their own insurance; or return to being a “self-insured” employer.

The insurance brokers advising the committee quickly said the first idea isn’t much of an option. Individual insurance policies can be “extremely hard to get,” they said, and not everybody is insurable on their own.

Herron said dividing the money up would give each employee about $592 per month to use for insurance on their own. He said he pays $460 per month for health insurance for himself and his wife.

At another point, Commissioner Cathy Armstrong said county employees are getting a deal under any of the potential rate increases presented during Monday’s committee meeting.

She said she pays over $600 per month in health insurance premiums to cover her family.

Most people, Armstrong said, pay more than the estimated $311 per month one option offered for family coverage in the coming year.

The Insurance Committee is scheduled to meet again in two weeks. Jones told members to study the information presented Monday and be prepared to make a decision next time.

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