HomeMy WebLinkAboutInsurance Committee Minutes 06.13.2001INSURANCE COMMITTEE MINUTES
JUNE 13, 2001 5:00 P.M.
OI,D COUNCIL CB. AMBERS
MF_MBERS PRESENT:
Chairman Mark Mace
Bud Johnson
Mary Embleton
Les Dienes
Bud Arnold
Guy Rolison
MEMBERS ABSENT: Ken Olson
OTHER PRESENT:
Dave Allen, Western States Insurance agent
Mark called the meeting to order at 5:10 p.m. Mary stated that in 1997-98, health
insurance costs to the city were $262,979. With a 20% rate increase projected in the
2001-02 budget, the costs would be approximately $511,561, which is nearly double
fi-om the '97-98 costs. Dave Allen then gave a brief history of the city's health insurance
carriers stating that YCI-IP first became involved in 1999 with a portion of the city's
employees; the other portion joining New West. Then, all employees went over to YCHP
in 2000 because New West would not renew. In the meantime, Blue Cross/Blue Shield
bought out 51% of YCI-IP. Therefore, for the 8/2001 renewal, there will be no YCI-IP
products available. He also provided copies of articles showing other entities
experiencing very large rate increases, and told the committee that this is very common
this year. Currently, the city has 57 employees and 4 retirees paying over $32,000/mo. in
premiums.
Dave went on to explain that the BC/BS product most like the city's current coverage is
the Blue Select HMO product. It has a higher out-of-pocket maximum of $2,000. The
preliminary rates show that the premiums would increase 41.84% over current with this
product. The high rate increase is due to the city's high usage. Claims and costs
exceeded premiums by 119.2%. He also explained that 16-20% was just in trend
increases of costs. There shouldn't be any changes in the dental premiums with Fortis,
but he hasn't received the renewal notice from them yet.
Some of the options the city may have is to look at a different plan from BC/BS called
Blue Choice with a 60/40 benefit. The "choice" is three types of concurrent coverage:
(A) is like a St. Vincent HMO with a PCP and a provider network with a co-pay on most
everything except hospitalization; (B) has a $750 deductible, 60/40 co-pay, and allows
the choice of any other BC/BS doctor; and (C) has a $750 deductible, 60/40 co-pay, and
allows any non-BC/BS doctor. Maximum out-of-pocket is $2,000/person and
$4,000/family. Dave stated that this plan s prermums would be 10-12~ lower than the
Blue Select plan. During discussion, it was stated that the union contract allows for a
$500 deductible, so this plan would not fit. Dave will get information to the committee
on a similar plan called Blue Choice Phis/Preferred, similar to the plan above, only with a
$500 deductible and a 70/30 co-insurance benefit. The premiums for this plan would be
about 6% less than the Blue Select plan.
Insurance Committee
June 13, 2001
Page 2.
Another option the city may have is to join an association. In the city's case, that
association would be the MMIA health association. Dave will look into that avenue, but
said that the time to join an association is during a "good" loss year.
Prescription prices are another factor that has driven health insurance costs up. The city
will need to make a choice to include a $100 deductible for prescriptions or not. Vision
coverage would be a BC/BS product, but would be a stand-aione product with a separate
premium.
Mark suggested that the union may have to agree to open the contract on this issue. Les
replied that at this time, the union would not be willing, unless the city would discuss
wages as well.
Mary brought up the fact that many employees' spouses have full coverage through their
employer, and thus there is a lot of"double coverage" occurring. Dave stated that this is
not an efficient use of premium because one plan is secondary to the other, and suggested
that the city look into a "flex" plan which offers employees a choice of how to spend
their benefit dollars, possibly resulting in a savings in the health insurance. He is not sure
if public entities can do this, but he will check.
Mark suggested that educating the users may result in savings by reducing usage, and
also that most people involved with "double coverage" may not know that it would not
jeopardize their insurability due to H]PPA laws. He also would like to do a poll of the
group to see what is their expectation of their insurance coverage.
The committee will go back to their respective groups and get input and reaction from
this initial discussion, and review the information g/yen them. Once firmer premium
figures are obtained, another meeting will be set up to discuss the matter further. The
meeting adjourned at 7:00 p.m.
Respectfully submitted,
Mary K. Eqnbleton
Clerk/Treasurer