City to weigh changes to workers’ health plan
City commissioners are considering major changes to the city employee health care plan, after projections estimate costs will grow by more than $1 million in 2010.
At their meeting tonight, commissioners will consider hiring CIGNA, a major health insurance provider, to take over the administration of the city’s health insurance plan. Blue Cross and Blue Shield of Kansas administers the city’s health insurance plan now.
The city’s health insurance costs have been increasing by about 15 percent per year on average.
“We can’t keep doing that year after year,” Mayor Rob Chestnut said.
The CIGNA proposal does not make any guarantees on what costs will be for future years, but city leaders said there’s some data that suggests the rate of increases may slow to about 6 percent to 7 percent per year.
The stakes for taxpayers are high. City Manager David Corliss said city taxpayers in 2008 spent about $7 million on providing health insurance to city employees and their families. The employees themselves contributed about another $3 million to the plan.
“That really would make it one of the largest departments in the city, if you look at it that way,” Corliss said.
And it’s getting larger. The city hired an independent consultant to study various health insurance proposals. The consulting group estimated that the city’s cost for health insurance would grow to about $9.5 million by 2010, if the city did not make changes to its plan. Under the proposed plan, the city’s share would still grow to about $8.9 million in 2010.
The city is making several changes to its benefits package, but staff members are recommending that the city continue to pay 100 percent of the premium for its employees. City employees do pay a portion of the premium, if their families are covered.
Chestnut said he was inclined to go along with the recommendation because the health care benefit is an important tool to recruit and retain employees. Chestnut also said he believed that although paying 100 percent of an employee’s premium is becoming uncommon in the private sector that it still remains relatively common in the public sector.
“That’s who we’re trying to benchmark ourselves against,” Chestnut said.
The League of Kansas Municipalities didn’t have data readily available on how many cities in the state pay 100 percent of the costs. In Lawrence, the way other governments handle the issue is mixed. The Lawrence school district, for example, does pay 100 percent of the premium for employees. Douglas County, however, does not pay the full premium for employees.
City employees are being asked to pay more in other areas. Premiums for employees with family plans are expected to see an increase of 4 percent. But staff members are recommending a unique program where those increases can be waived.
If the city employee agrees to undergo a health risk assessment test and signs an affidavit that they are a non-tobacco user, the increase will be waived for 2010.
The goal is to get more employees to see the doctor before health problems arise, which should reduce the amount the city has to pay out in claims.
“We’re hoping to get some real positive results by getting employees more engaged with their health,” Chestnut said.
Commissioners meet at 6:35 p.m. today at City Hall, Sixth and Massachusetts streets.