City of Lincoln
Employee health plans to see no premium increases in 2021
Aldermen to decide on Health Savings Account contributions next week

 

[October 02, 2020] 

At the Tuesday night meeting of the Lincoln City Council, aldermen were told that R.W. Garrett, the insurance broker for the city’s health plans, has negotiated a zero percent increase of the 2021 health plans with Health Alliance.

Health Alliance quoted a 5.9 percent increase in the city’s health plans, but Garrett staff worked with the company to do away with the increase and maintain the current premium rates on the same coverage.

In addition, the plans will now offer choices in deductible amount for employees. The choice will be the decision of the individual employee and can be either $1,500 or $2,800.

Higher premium rates will be implemented if employees choose the lower deductible.

Within the three union contracts with the city, the contract with the firefighters specifies that the deductible shall be $1,500. When determining coverage for the 2020 calendar year, that deducible was not offered.

The city worked with the firefighters union to reach a compromise where the city would increase its contribution to the employee Health Savings Account (H.S.A.) from $110 to $215, if the union would go along with the $2,800 deductible.

The $215 contribution was then extended to the employees of the other two unions for police and street workers. Prior to the change those city paid contributions to the H.S.A. were $115 per covered employee.

With the 2021 plans including the option for a $1,500 deductible the requirement of the union contract has been satisfied. However, at the same time, aldermen learned that they can save money on the overall insurance premiums if employees will opt for the $2,800 deductible and the higher contribution to the H.S.A.

The city has calculated that the cost of health insurance coverage will be as follows:
 

$2,800 deductible
Monthly insurance expense	$42,520.00
Monthly H.S.A. contribution	$11,825.00
Total monthly expense	$54,345.00

$1,500 deductible
Monthly insurance expense	$49,033.00
Monthly H.S.A. contribution	$6,040.04
Total monthly expense	$55,073.04

At the Monday, October 5th meeting of the city council, aldermen will vote on approving the $215 H.S.A. contribution as an option if the employee takes the $2,800 deductible. The vote will also include reverting back to the original amounts set prior to 2020 if the employee chooses to go with the $1,500 deductible.

If approved, employees will be asked to make the choice based on their personal needs. They may choose a $1,500 deductible on their health coverage and $110 or $115 city contribution to their HSA. The second option offered will be to keep the current $2,800 deductible and the city will contribute $215 to the employee H.S.A. account.

[Nila Smith]