Lincoln City Council
Part one:  Whiteman and Schaub seek to represent the city employee health insurance

 

[September 17, 2020] 

On Tuesday evening at the Lincoln City Council Committee of the Whole councilmen heard presentations by Nathan Whiteman representing American Central Insurance, and from Nancy Schaub with Sara Schwantz representing R. W. Garrett Insurance.

Currently, the R. W. Garrett Agency represents the city. The health insurance plans are those offered to the employees of the three unions representing the police, fire and street departments.

The city has an Insurance Advisory Committee made up of two members from each of the union locals, two aldermen, mayor, city administrator, city clerk and payroll clerk, and the city treasurer.

Whiteman began saying, he was a Lincoln native who attended Lincoln schools and was currently living in Lincoln. He noted that the agency he works for has its main office in Springfield.

He has had interest in representing the city for quite some time, but had found it ‘challenging’ to get his foot in the door.

Whiteman said that insurance is an “ugly business” where agents are always going after each other’s clients, but that the bottom line is that there are many good representatives available and they all offer similar services.

Whiteman said that he is currently representing the county and has offered them added value services that are working well for all.

The county has an online portal available for employees and administrative staff. He said that it adds transparency to the county’s insurance program, makes it easy for employees to view their plans and input their own changes. For the administrative staff, it reduces the time they have to invest in updating insurance information and offers other convenient services as well.

Whiteman said that his agency works with several major health insurance providers including Blue Cross, Blue Shield and Health Alliance.

Ron Keller asked Whiteman to explain a topic from the committee meeting pertaining to large group cooperatives for insurance.

Whiteman said that his agency works with a group plan that brings several smaller groups into one cooperative. There are definite advantages being a part of a much larger group, not the least of which is premium costs.

He said that a group of 20 to 30 people are going to automatically pay more in premiums than a group of 1,000 or more. In addition, the city’s premiums are based on the claim payouts in the previous year. When in a large group, the claim payouts are averaged across the entire group, so losses or claims have a smaller impact on the premiums.

Whiteman said that for a new client, he would never recommend going into a group cooperative right off the start. He said it would take about a year to gather information, look at available groups and choose select groups to recommend to the city.

He explained that part of the advantage of the larger group is that the agent can “outsource” some of the components of the plan and tailor the overall package to meet the needs of the overall group and also reduce costs. Whiteman also said that the group members should be educated on what they are doing and that they will do better if they make long term commitments to plans such as two to four years.

Treasurer Chuck Conzo asked Whiteman what his official title was with the agency. Is he the broker or an agent? Whiteman said he is an agent; the agency owner is the official broker.

City Administrator Beth Kavelman asked Whiteman how many days a week he is in his Lincoln Office. Whiteman said he spends a lot of time on the road, perhaps two to three days. He spends one day per week in Springfield and one to two days per week in Lincoln.

When Whiteman had finished, Schaub and Schwantz came forward to speak. Nancy Schaub began their presentation and noted that also in the room was agency owner Roger Garrett and vice president Joshua Garrett.
 

Schaub said that she has been working in Lincoln 30 years. She has a degree in Life/Health Insurance and has achieved six professional designations. She has served the city of Lincoln for 20 years.

R.W. Garrett Agency has ten employees in the Lincoln office and the majority of those employees live locally. Lincoln is the home office of the agency and it also has two satellite agencies in other communities. Schaub said that R.W. Garrett is not a small agency. They represent about 2,500 clients, which equates to more than 50,000 lives. The agency generates approximately $3,000,000 annually in revenue.

Schaub walked through the issues the agency had to deal with last year with the city plan. The initial premium quotes for the city came in with a 30 percent overall increase for the 2020 plan. She said this was because the city had experienced major claims adding up to more than $600,000 in both 2018 and 2019. The severe rate increase was a result of those major losses.

Schaub said that R.W. Garrett went to bat for the city, asking the insurance provider to look a little further back into the history of the city. As a result, the provider did come down on the overall increase, dropping it to 19 percent.

Still looking to help the city, Schaub said that additional negotiations with employees and changes to the plans had resulted in a bottom line overall increase of only three percent.

Schwantz also spoke to the aldermen, noting that she has worked with R.W. Garrett Agency previously, left for a time, but returned exactly one year ago. Schwantz is a large account representative for the agency.

She also spoke about the portal program that R.W. Garrett offers. She explained their choices based on research and said the agency chose a very user friendly portal that includes services in addition to insurance monitoring, such as online documentation of new hires. The portal also offers “e-doc document signing” a phone app for employees, is Cloud based, secure, and free to clients and their employees.

Keller asked who would be the primary agency contact for the city. Schaub said that would be her.

Kavelman asked how many days a week Schaub is in Lincoln. Schaub said that especially right now, she is not traveling, and is in the office five days a week.

City Clerk Peggy Bateman said that the city should ask of Whiteman if the online portal he is offering has a charge attached. Whiteman said that with his program, there is a $400 implementation fee, but the portal is then free. He added that his program also offers e-doc signing and “A to Z tracking” of employees using a program called Employee Navigator.

Continued…

[Nila Smith]