Insurance switch saves money for city

What started as a citizen’s suggestion manifested in a decision that will save the city between $40,000 and $50,000 in the coming year, said High Springs City Manager Jim Drumm.

During a Sept. 7 budget meeting, city commissioners listened to John White, a representative from the city’s contracted insurance broker, Bouchard Insurance, as he presented a total of 12 alternative options to the city’s current health insurance plan.

After several hours of debate, the commission agreed to switch from the city’s current provider, United Healthcare, to a new insurance plan with Aetna.

Number five on the list of 12 proposals, this plan is the closest to the coverage city employees currently have under United Healthcare. The $500 deductible for individuals and the $1,500 deductible for families are the same. But the new plan does not cover out-of-network care, and going to a doctor not affiliated with Aetna will mean paying out of pocket.

White said there are hundreds of in-network doctors to choose from in the greater Gainesville area.

While there are some other variations in coverage between the current plan and the new one, the rate for the Aetna plan is 1 percent lower than the city’s current rate with United Healthcare, which is about 4 percent, and if the city renews the current plan, the rate is expected to go up to about 18.43 percent.

This ‘Option 5’ plan is not at all what local resident Robyn Rush had in mind when she made the suggestion several weeks ago that the commission take a look at the benefits associated with health savings accounts (HSAs) as a possible answer to balancing the 2010-2011 budget.   

HSAs are accounts tied to high-deductible insurance plans, maintained for the employer and employee to deposit pre-tax dollars which can then be used at any time by the employee for any qualified health cost.

An employer, such as the City of High Springs, takes a portion of the money saved from the plan’s lower rates and deposits it into employees’ health savings accounts. This money can then be used as a reserve to help the employee when they have to pay out-of-pocket because of the high deductibles.

White did present one HSA plan, which he said was the only one offered that included an HSA component and fit all the city’s criteria.

The commission came to the conclusion that the deductibles for the HSA option might not be affordable for most city employees, and agreed they were not comfortable with the moral obligation they would feel to continue to make deposits of equal or higher amounts each year to employees’ accounts even though it is not required.

Commissioner John Hill emphasized the notion that if people get a certain amount of money from the city one year, they will expect the same amount the next year.

Despite the estimated $100,000 the city would save, the commission decided there were too many issues that could arise from the HSA plan.

Another key issue addressed were possible implications regarding the city’s contract with the Police Benevolent Association (PBA), which provides that the city pay 100 percent of police department employees’ health benefits.

All other city employees are required to pay $20 toward their coverage. This difference conflicts with a federal healthcare reform requirement that all employees are offered equal coverage.

White said the city would not have to come into compliance with this until its contract with the PBA is up for renewal, which will be in two years. However, the commission intends to attempt to renegotiate this at an earlier date if possible.

The commission opted to cut dental coverage entirely. This could become an issue if the PBA decides to contest it, because according to the contract, the city cannot reduce union member benefits.