Higher deductible approved for some employees in 2013Published 1:15pm Wednesday, November 21, 2012
In an effort to cut costs in 2013 the Lawrence County Commissioners approved an insurance plan that will increase some county employees’ deductible by $500.
Those employees covered under the United Health plan will now have a choice of a $1,000 or $1,500 deductible. Before the deductible was either $500 or $1,000 depending on what the employees wanted to have as their share of the premium.
Right now for the lowest deductible single plan, an employee pays 17 and a half percent of the premium while the employee with a family plan and highest deductible pays 11 percent of the premium.
Next year United Health is increasing its premium by 8 percent, if the current policy with the lower deductibles were adopted. That is because the county’s loss-claims ratio was at 86 percent. The loss ratio would have to be at 75 percent for there not to be any increase.
This past year the county paid out $2.8 million in premiums a year for the United Health coverage and a total of $4,263,795, including insurance for Teamster employees. With the 8 percent increase plus factoring in a possible Teamsters insurance hike, the projected cost for county health insurance is at $4,604,910 annually. That would mean a $341,114 increase.
By increasing the deductible, the hike is reduced to $158,160 a year or a 3.70 percent increase rather than the original 8 percent.
“It will cost the county a lot more money if we don’t make a change,” Commissioner Bill Pratt said before the commissioners voted at their regular meeting Tuesday. “And someone in all likelihood will lose his job.”
The ad hoc county insurance committee declined to make a formal recommendation on what change it would like to see, but told the county’s insurance consultant Jeremy Eastwood that it wanted the deductibles to remain at the original range.
The committee also said there would be far less participation in United Health’s wellness program, designed to cut insurance costs by improving participants’ health, if the county went the higher route.
“We don’t have the money to do (the lower premium),” Commissioner Freddie Hayes said.
Also at the meeting the commissioners rescinded an earlier motion that would have substituted the county’s life and long-term insurance policies that are with Lincoln Financial from Mutual of Omaha.
At the meeting representing a group of employees was Steve Jenkins of the county’s juvenile court, who opposed switching to Mutual of Omaha.
“Some people in our department have concerns,” he told the commissioner. “The representation we have with Lincoln has been good. We have seen no contract (with Mutual). If you as commissioners don’t have this locked down, we have nothing.”
The idea of a switch was creating what Pratt called an “uproar” among employees.
“In my opinion there is not enough reason to change companies,” Pratt said. “I don’t think there is enough gained to make this commotion. It really is not broke.”
“What changed your mind?” Commission President Les Boggs asked.
“The uproar of the people,” Pratt said.
“We do have a lot of concerns with changing,” Hayes said. “(Employees) haven’t received any literature. You have to let the people know.”
“We are waiting for a contract to review,” Boggs said. “I thought we had agreed to do this. I do believe there were plenty of legitimate reasons to change.”
The impetus for the change came when an employee from the county engineer’s office was in an accident forcing him on long-term disability. That department has long-term disability policies with two separate companies. According to commissioners the employee was expecting to get full disability coverage from both policies, instead of the total of 60 percent that is only available. There was also a question that employees could not pull out of Lincoln’s program until next year’s open enrollment and that those who wanted out could not get a premium refund.
This lead to a letter being sent to the commissioners complaining about Lincoln’s rules.
“Those were strong enough reasons to give people their premium back,” Boggs said. “I think we made every effort with Lincoln.”
Boggs was the sole vote made against rescinding the motion to make the change to go with Mutual. Then he voted to Lincoln.
“I have the highest respect for my two colleagues,” Boggs said after the vote. “Now we have to put our heads together and start on the budget.”