Wednesday, February 20, 2013
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County facing 35 pct health insurance increase; invites employees to meeting

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[February 20, 2013]  Last Wednesday held a night of tense discussion for the Logan County Board Insurance Committee. The primary topic discussed was the renewal of employee health insurance with Health Alliance.

Employee survey

Before the discussion on insurance renewal began, the committee briefly discussed the results of a survey given to employees. Seventy-one employees responded anonymously, which is over 50 percent of the total employment under the county.

The committee will look over the results of the survey before next month's meeting. In glancing at some of the comments submitted, the committee members have been able to infer that most county employees would like to see the current insurance plans maintained.

Health Alliance renewal options

Jodi Dacer presented the committee with figures on the losses incurred by Health Alliance due to large insurance claims over three coverage periods:

  • May 1, 2010-April 30, 2011 -- a loss of $304,804

  • May 1, 2011-April 30, 2012 -- a loss of $281,304

  • May 1, 2012-Dec. 31, 2012 -- a loss of $284,652

In total, over the last three coverage periods, Health Alliance has lost $870,760 since May of 2010. Health Alliance analyzed the three coverage periods in order to uncover any trends in the figures and came up with the average per member, per month figure that would be necessary to sustain the plan. With the addition of administrative costs, the average calculated came to $562.59.

Chairman Jan Schumacher expressed concern at these figures, as she believed the county insurance was in better shape. Nancy Schaub responded by saying that since last August, a number of large claims have been filed.

Dacer added that specifically there have been six claims that account for $417,507. Dacer said that out of those six, two of the claims are considered finished, with the other four being considered ongoing.

In order to maintain the current plan with Health Alliance, the premium paid by the county would have to increase by 35 percent to make up for the losses.

Committee member Kevin Bateman performed some brief calculations, saying that such an increase would require $20,000 more every month, or just under a quarter of a million dollars in expense to the county or the employees.

"If we were only to take the current period, it would have required a 55 percent renewal increase," said Dacer. "We're looking at the history and weighing that."

Currently, the county offers three options within their insurance plan.

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Dacer also put together some recommendations to reduce the increase in renewal fees.

  • The first option is to make a few changes to two options of the overall plan, reducing the renewal increase to 27.79 percent. These changes would include an alteration of copayment amounts and outpatient coverage.

  • The second option is to consolidate all employees into one POSC plan, lowering the increase to 32.83 percent. This plan would also include copay changes. Dacer also said this type of plan is very popular with Health Alliance customers.

  • The third option is to consolidate all employees into one PPO7500 plan, which would result in a minus 0.13 percent renewal change.

Dacer told the committee that the changes in the plans provided would be competitive with the type of coverage that will be seen in the exchange environment in 2014, when the Affordable Care Act goes into effect. The exchange will provide a way for individuals to buy health insurance under the new federal laws if employers do not participate. Health Alliance will be part of that exchange.

Bateman told the committee that he has spoken with other business owners who are considering dropping their insurance plans in order to provide employees with extra taxable income to buy their own insurance. The county could also do this in May of 2014 instead of renewing again.

Schaub told the members that the county could not enter the exchange as one entity until 2017 due to the size of the employee pool.

The committee decided to have a special meeting in order to provide the employees with information on their insurance plans and what could be done to alter their coverage, if anything should be done at all. The meeting will be at 5 p.m. Feb. 26 at the courthouse.

"Just for the record, I don't like delivering 35 percent renewal increases," said Dacer at the end of the meeting.

Committee members present were chairman Jan Schumacher, Andy Anderson, Kevin Bateman, Bill Martin and David Hepler. County board member Robert Farmer was also present. Nancy Schaub of R.W. Garrett Agency and Jodi Dacer of Health Alliance were present to provide the insurance information.


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