PARKERSBURG - As a new policy year approaches, Wood County commissioners reviewed health insurance options and decided on an increase in deductibles to try and keep costs down.
Meeting with the commission Thursday, Mark Schwendeman, an insurance consultant who has been under contract with the county since 2007, updated county officials on the status of coverage, potential changes resulting from health care reform and policy changes that could impact costs. The county's health insurance coverage is through Highmark Blue Cross Blue Shield.
"We conducted a market search with five insurance carriers, four were uncompetitive. CareLink provided a quote, but the rates came out in at 14 percent over current rates," Schwendeman said.
Photo by Pamela Brust
Mark Schwendeman, who has been retained as an insurance consultant for Wood County since 2007, updated commissioners Thursday on the status of coverage, potential changes resulting from health care reform and policy changes that could impact costs.
The originally proposed rate formula would have increased by 18.1 percent for the fiscal year July 1, 2012 through June 30, 2013. After some discussion and review of claims experience, Highmark's initial offer for the county commission's renewal was 9 percent for one year. "They have since offered a 9 percent renewal for 12 months for the first year and no more than a 9 percent renewal for year two or a 14 percent renewal for year one and 0 percent for the second year," he said.
"Neither of those options requires a commitment from the commission to renew with Highmark the next year," Schwendeman said.
The inflation trends is still around 13 percent, he said.
An employee benefits committee made up of officials and representatives from all the county offices meets regularly and makes suggestions and comments on changes in policies for insurance coverage and coordinates and proposes wellness activities.
Under the county health insurance plan, the employees have their own health insurance paid by the county.
If the employee pays for additional family coverage, they pay a percentage of the additional cost.
The county's health insurance plan has two parts: a High Deductible Health Insurance Plan and a Health Reimbursement Arrangement.
Currently employees pay a $2,750 deductible, with the employee paying the first $250 annual deductible, the county reimburses them for the next $2,000, and the employee pays the next $500 out of pocket.
Schwendeman said claims are down, and he noted wellness activities and programs have been "very active."
"The overall costs of the plans are estimated to be only 2 percent greater for the year ending June 30, 2012 as compared to the previous year, and the overall costs for the year beginning July 1, 2012, through June 30, 2013, are expected to be 2.65 percent higher than this year's cost, assuming the reimbursements for the HRA are consistent for each of the two years," he said.
Schwendeman noted the average increase in health insurance costs for the county over the last five years has been less than 3 percent per year.
He recommended the commission accept the option which increases deductibles and out of pocket maximum to $3,000 for single/$6,000 for family coverage. The HRA reimbursement would be increased to $2,250.
"With the combination of the estimated higher HRA reimbursements for the year, the estimated overall cost would be $2,220,151 or about 1/2 percent higher than the current year. The estimated savings from the renewal at the current deductible and HRA reimbursement would be $25,480 for the employer and $5,641 for the employees," Schwendeman said.
Last year the county's total premium cost was $2.1 million.
"We budgeted for a 7 percent increase, so we have the funds available in the budget to put the additional money into the HRA. It would not impact the employees because we are assuming the additional cost," said commission President Blair Couch. "We went to the HRA so if we had savings, which we did, we could distribute those funds back to the employees as a health care dividend, as a reward for their efforts to try and impact costs, they could see a benefit."
The commissioners voted unanimously to accept the option recommended.