Portage is moving city employees to a different insurance plan instead of the city's own plan. It's a smart move that will reduce premiums for employees and the city alike.
Like other units of local government, Portage has been struggling with the high cost of health insurance. The answer is often to dive into a larger pool.
The state of Indiana extended an offer to local government to join the state's health insurance plan, but so far there haven't been many takers. Most local government employees are accustomed to benefits more generous than the state's plan.
The Indiana Association of Cities and Towns started its own insurance plan, which towns like Highland have found more attractive than trying to maintain its self-insurance plan.
Portage previously used several providers for its different employee groups and self-insurance for excessive health care claims.
Now it's switching all employees to the Operating Engineers 150 Health and Wellness Fund.
It's a win for the city, which will save $1.4 million through lower insurance premiums.
It's a win for employees, too. Some employees, but not all, previously paid a small portion of their insurance premiums. Now none of the employees will pay. For those who did pay, that's a savings of $50 to $100 a month.
Using a union's insurance plan is akin to school districts using the Indiana State Teachers Association insurance plan for faculty members. In Portage's case, though, even employees who belong to other unions will still be included in the union insurance plan.
"Ultimately, (Local) 150 made us an offer the city couldn't refuse," Clerk-treasurer Chris Stidham said.
The Local 150 plan has "richer benefits" as well as local costs, Stidham said.
Other units of local government should likewise look at options that could benefit both employees and the taxpayers instead of sticking with the status quo.
When seeking bids for insurance coverage, be creative.