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Elizabethtown City Council is reviewing a plan that would increase deductibles, co-payments and out-of-pocket health expenses for employees in an effort to stem the tide of health care inflation.
Tim Davis, chairman of Employee Benefits Administrators, told the council Monday it has been gracious toward the city’s workforce but must modify its health plan and mandate its wellness program to lower the costs of the plan. The city is self-insured but EBA helps manage the plan, said Mayor Tim Walker.
Davisproposed the council raise its in-network single deductibles from $300 to $500 and in-network family from $900 to $1,500.
Out-of-network single deductibles would increase from $600 to $1,000 and out-of-network family from $1,800 to $3,000 under the proposal.
Davissaid he has not sold a $500 deductible in five years or more, indicating the plan is still a bargain for workers as many businesses raised their individual deductibles to $1,000 or more.
Instead of one large increase, Davis proposed a series of incremental increases to tackle the problem and acclimate workers to the changes gradually.
“If we did it all at once, it would be ugly,” he said.
Maximum out-of-pocket expenses would jump from $500 to $700 for in-network single and $1,500 to $2,100 for in-network family plans. Out-of-pocket expenses for out-of-network single would double from $1,000 to $2,000 and out-of-network family would double from $3,000 to $6,000.
Office visit co-pays, meanwhile, would grow from $20 to $25 and emergency room co-pays would jump from $75 to $250.
Davissaid the ER is being overutilized and treated as a general practitioner for some under the plan.
“It’s very important that we change that behavior,” Davis said.
Increasing deductibles, maximum out-of-pocket expenses and co-payments could have saved $45,400 on processed claims from Jan. 1 to Sept. 30, he said.
The proposal also recommended a switch of prescription plan providers from CVS Caremark to HealthSmart Rx, which would save around $40,000, Davis said. A smoker’s premium of $20 per month would be added for each person on the plan who smokes.
Councilwoman Edna Berger asked if similar premiums could be applied to obesity or alcoholism. Davis said the city must be careful to avoid discrimination.
“Smoking is a choice,” he said.
If an employee’s spouse is offered health insurance through his or her employer, the spouse must take it under the proposed plan. Davis said this could cut down on the number of claims on the plan and reap a significant savings. Spouses who work full-time must provide written verification from their employer stating insurance is not offered. Spouses not employed full-time or retired must submit a signed statement verifying coverage is not available. If the spouse is retired, written proof must be offered showing coverage is not available on the retirement plan.
Davisalso implored the city to make its wellness program mandatory. The program provides health screenings, such as blood pressure checks and blood tests, and recommendations are made to the employees following the screenings about how they can live healthier. Walker said the program likely will be mandatory for all those under the health plan.
Davissaid the program could save lives and catch problems before they turn into chronic medical conditions with expensive medical claims.
Drug costs likely will go up, he said, but it will be easier to deal with than cancer or heart attacks that crop up.
“If we can stop that, it will be good,” he said.
Finance Director Steve Park said he has been pushing the city to make adjustments for years and cash flow problems have occurred with the plan’s funding that has forced him to dip into the city’s fund balance to cover claims. It was unknown Monday evening how much the city pays out annually on medical claims.
Councilman Ron Thomas said employees will not be happy with the changes but some blame falls on the council for failing to make adjustments sooner.
“We tried to be good too long,” he said.
Marty Finley can be reached at (270) 505-1762 or email@example.com.