PORTAGE | Reigning in health insurance costs has been a priority for the city.
It's been a balance, said Mayor James Snyder and Clerk-Treasurer Chris Stidham, to try to reduce the city's deficit spending on health insurance and provide a fair deal to employees.
"At the beginning of the year, we realized health care costs were out of control," said Snyder.
The state allows the municipality to budget $2.8 million toward employee health benefits. This year Stidham believes the city will spend closer to $5 million, leaving a large deficit.
Throughout the year, some changes have been made, including changing the provider network and the city raising its own deductible for its self-insurance program.
What was left was changing the employee health insurance program.
They have come up with a new plan for the city's 35 non-union employees which will be up and running sometime in late winter. The city has 217 employees with health insurance, the majority of which work under union contracts where health insurance benefits must be negotiated.
Presently non-union employees are offered a traditional health insurance plan and pay premiums of $50 per month for single coverage and $100 per month for family coverage. Deductibles for the plan are $250 and $500.
The new plan will combine a high deductible health insurance policy with a health savings account. The deductibles will be $1,500 for an individual and $3,000 for a family with maximum out-of-pocket expenses set at $3,000 and $6,000, respectively.
Each employee who switches to the plan will receive 3 percent raises for 2013.
Premium costs will remain at $50 and $100 per month. Employees will be offered incentives. Non-smoking employees will receive a $25 per month credit. Employees who participate in a health education program will receive another $25 per month credit.
In addition, said Snyder and Stidham, each employee opting for the new plan will receive a one-time $1,200 deposit into their HSA from the city to compensate for the higher deductible.
Employees will also have the option to sell back vacation time with the money being deposited into their HSA. In the first year they will be allowed to sell back one week of vacation at 125 percent the pay or $1,000, whichever is greater. In the second year, they will be able to sell back two weeks of vacation.
Employees will also have the option to sell back up to three personal days at 50 percent the cost, with those funds either deposited into their HSA or given to the employee.
"This is a very rich offering and a very creative offering," said Steve Brady, the city's insurance consultant. "It is at least as good as anything I have ever heard of."
Stidham said one reason they settle on this plan was because when they looked at health insurance claims, they found that 80 percent of the employees aren't using their benefits, but are paying for the 20 percent who are.
He added that if all city employees were on the new plan, it would reduce the city's deficit by about $500,000.
"We didn't want to go and do what others are doing, that's getting more money from the employees. It has been a balancing act," said Snyder.
The City Council will have to approve several ordinance amendments to allow the changes to happen. Those changes should be presented to the council at its January meeting.