Health insurance plans for government workers, who historically enjoyed good benefits to compensate for lower wages, are taking on a new shape.
Insurance plans are beginning to resemble those in the private sector, with employees paying higher premiums for health care.
"Local governments have been expected to do more with less," said Hammond City Controller Bobby Lendi.
A revamped health insurance plan went into effect in Hammond on Jan. 1.
"The new plan is modeled after the State of Indiana plan for employees," Lendi said.
Employees chose from three options, a PPO or one of two high-deductible health savings account plans. Plan rates vary, from $40.82 bi-weekly for family coverage to $110.90 bi-weekly for family coverage. The high-deductible plans include a health savings plan that rolls over unused funds each year.
Comparatively, employees paid $1 a year for insurance in 2000, and between $12 and $25 a month since Mayor Thomas McDermott Jr. took office, Lendi said.
The new plan in Hammond, which covers about 1,100 employees and retirees – not including dependents – is expected to save the city between $2 million and $3 million, depending on the number of incidents.
Tax caps are part of the reason for the decision to remodel the health plan, Lendi said.
Like other municipalities, Schererville is feeling the hit of higher insurance costs.
"Our cost for employees are higher, especially with a frozen levy," Town Manager Bob Volkmann said.
As with the private sector, health insurance costs are typically the highest expense, after salaries, he said.
The town paid out $2.8 million in claims in 2012, covering 157 employees and 450 total, including dependents, Volkmann said.
"Something has to give," he said.
The choice was to reduce benefits or increase employee contribution. Deductibles increased.
But, just as the private sector seeks ways to trim costs, so does the public sector.
Hammond employees who have a blood screening done with their doctor are eligible for a discount on their premiums. The idea is similar to the state's plan, in which non-smokers pay less for insurance than smokers, Lendi said.
The goal is to curb potential long-term costs from undetected problems, such as high blood pressure or high blood sugar. By discovering those health problems early, people can receive preventive treatment to avoid serious medical events, Lendi said.
Schererville offers similar wellness screenings, Volkmann said. He plans to propose making wellness screenings mandatory.
"The idea is to improve the wellness of the group and ... to hold down cost," Volkmann said.
The Portage City Council in January approved two ordinances and put on hold the possibility of pay increases for nonunion employees choosing a new health insurance plan.
Portage is offering less comprehensive health insurance and giving a raise to compensate, said Clerk-Treasurer Chris Stidham.