High costs force Valpo to halt self-insurance program

2012-08-26T18:12:00Z 2012-08-27T13:58:08Z High costs force Valpo to halt self-insurance programBy Phil Wieland phil.wieland@nwi.com, (219) 548-4352 nwitimes.com

VALPARAISO | After Saturday, the city of Valparaiso will no longer be self-insured.

It'll be the first time in 30 years.

The city's Board of Public Works and Safety voted Thursday to approve joining the IACT Medical Trust. City Administrator Bill Oeding said Valparaiso will become the 18th community in the state to join the employee insurance program established by the Indiana Association of Cities and Towns.

"There was no way we could afford the old system at all," Oeding said. "The benefit (of going from a self-insured to a fully insured system) is we avoid the big peaks and valleys."

The city's self-insurance program was budgeted for $1.8 million this year, but the city so far has spent about $3.5 million on claims for all employees, including the employees' share. The city's 283 employees will become part of about 3,000 under the IACT plan, which Clerk-Treasurer Sharon Swihart said was created about three years ago.

"The costs have been creeping up the last few years, but this year it's the worst we've ever had," Swihart said. "In a time of decreasing revenue with tax caps, we've got to stabilize this thing."

Swihart said the program has nine different plans the city can choose to offer employees. It appears they will be given the option of choosing between a high deductible combined with a health savings account or a preferred provider organization that will be a little more expensive.

Although the city's current insurance plan expires Friday, the city will choose a plan that keeps benefits about the same for the next four months to provide a transition period for everyone to receive the information about the new plan and make a choice for their families.

"We're really no different than any other business or government agency," Oeding said. "Self-insurance served us well for many years. This will give the employees for the next 16 months good quality health care, and we will stabilize the pricing with a fully monitored program."

He said the city will continue to pay for employees' dental insurance and still plans to provide the healthy access clinic for employees for at least the next four months.

"Will it mean a premium increase for the employees? Yes," Oeding said. "I don't think there will be any savings to the city over what we were paying. The benefit is stabilizing the costs to the city and the employees."

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