Commission discusses health insurance
By Joey Berlin
Originally published 12:09 p.m., November 29, 2007
Updated 12:09 p.m., November 29, 2007
Should the city switch to a fully funded group health insurance plan, or stick with a self-funded plan? That debate ate up the largest chunk of the Emporia City Commission’s study session Wednesday morning in the City Conference Room.
The city has employed a self-funded insurance plan for the past 17 years, but claims have piled up in the past two years. The city’s current insurance administrator, American Sterling Insurance Services, is bidding to retain the city’s account. Blue Cross/Blue Shield, Preferred Health Systems and the McGinnes Group have submitted fully funded proposals.
City Personnel Specialist Dorothy Shipman prepared a summary of the pros and cons of self-funded and fully funded plans, along with spreadsheet summaries of the proposals from Blue Cross/Blue Shield, Preferred Health Systems and the McGinnes Group. The summary also included a summary of the State Plan available to employees of public employers. Newman Regional Health will subscribe to the State Plan in 2008.
Shipman’s summary stated that a fully insured plan provides the city with “exactly what the worst case financial exposure is,” while a self-funded plan does not. Disadvantages of a fully funded plan include the fact that unspent funds will belong to the insurance provider, rather than the city.
However, with the self-funded plan the city currently has, according to Shipman’s summary, “proposed funding is insufficient to maintain or build reserves if we have another catastrophic claims year. If claims in 2008 are as high as in the past two years, the city would see a shortfall of $15,000 or more.”
“Again, we have to understand that with a self-funded plan, we as a city would take on the risk of being financially underfunded,” Shipman said at Wednesday’s session.
Commissioner Jeff Longbine said he has learned in his business that following actuarial data is important.
“I don’t have anything against a self-funded program,” he said, “but you have to follow the actuarial data and price (the program) accordingly.”
Commissioner Bobbie Agler favored looking at the non-self-funded plans “so the employees have the ability to control their costs, and as a practical matter the city has the flexibility to control its costs.”
Mayor Julie Johnson asked Shipman if a decision on the insurance plan was necessary before Dec. 31. Shipman replied: “It is and it isn’t. There’s no contract that commits us to a year with American Sterling. ... We could, if necessary, make our switch date March 1, April 1.
“The problem with that is, then you start a new deductible year, which is January ... we have done that in the past, and that’s a horrible nightmare.”
Johnson made it clear she wanted to take time to evaluate what the city would do.
“I would say that moving from the system we have to another system is a major decision, and I am unwilling to rush through it,” she said.
During the study session, commissioners also:
Discussed the creation of a bike trail planning committee. Much of the discussion centered on how independent and formal/informal the committee would be. Commissioner Kevin Nelson said if the planning committee does “a good enough job, it’s something that runs itself.” The commission leaned toward a resolution creating an informal committee that chooses its own members.
Reviewed green and cart rental fees for Emporia Municipal Golf Course, with a review of the results of research by Assistant City Manager Mark McAnarney into rates in other cities. City Manager Matt Zimmerman said that instead of an across-the-board increase on fees, the city would look more at increasing some rates and making other changes, including the elimination of some expenses.
Discussed implementing a pricing structure for use of the Emporia Zoo for off-hours, non-zoo-related activities. The commission reached a consensus to approve an off-hours plan, and Zimmerman said he would draft an ordinance.
Reviewed bid specifications for two new Emporia Police Department squad cars included in the 2008 budget. Interim Police Chief Mike Lopez said two new items were added to last year’s bid specs: A flex fuel engine and Goodyear tires.
The 9:30 a.m. session started with an action meeting in which commissioners approved one ordinance and three resolutions related to Penny Lane east of Weaver Street. The commissioners designated Penny Lane as a main trafficway connection and authorized the issuing of general obligation bonds for street improvements, as well as for sanitary sewer, drainage and water system improvements. Commissioners then adjourned to a brief executive session to discuss nonelected personnel.
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dhcc66 (anonymous) says...
Ok, i have no idea why some of this is taking the comission so long to decide on. It seems to me that if there is ANY chance of a shortfall with a self funded plan, and the benefits to employees would increase on a state or fully funded program, this would be a no brainer. Ok, so there may be some years where we "overpay"....but as i remember, commissions in the past have had to deal with raising costs to employees and having shortfalls far more frequently than the opposite.
Surely our faithful city employees who have done without much of a raise and with rising health benefits costs/declining health benefits deserve somewhat of a break. If changing to a state or fully funded program doesn't do what they hope, they could always change back...right??
Secondly, I want to know why we have "mid sized" patrol cars instead of the full sized ones most other departments have. I've seen officers try to fit suspects into the rear seats of the cars they have now and it's not pretty. Secondly, i've heard from friends on the department that the Chevrolet police package has been horrible to maintain compared to the old fords or even the old chevrolets. why don't we look at repair cost as part of the equation? if they have been piling a couple of thousands of dollars into maintaining a lesser car, why not spend the money up front to buy a more durable car. I guess if the bottom dollar is a problem..i've seen sub compact patrol cars in euro countries that they could probably get away with importing to save a few more pennies....get it right comissioners...please
November 29, 2007 at 1:04 p.m. ( permalink | suggest removal )
admireed (anonymous) says...
ask the former commissioners why they bought Chevrolets
November 29, 2007 at 1:08 p.m. ( permalink | suggest removal )
dhcc66 (anonymous) says...
admireed...it was because of "the bottom dollar" from what i understand and nothing else. i recall a comission meeting from several years ago where one police official brought at least two persons in to make statements on the down side of purchasing the chevrolets over the fords. If i recall, the bottom dollar difference was less than 2000 dollars and the issue was greatly increased cost of maintaining the chevrolets that were already in service versus the lower cost of maintaining the fords.
oh, and at this point, why worry about former comissioners. it's not them that we have to worry about
November 29, 2007 at 2:26 p.m. ( permalink | suggest removal )