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Elizabethtown City Council has followed through on a recommendation to tweak its employee health care plan.
The council approved a motion Monday to increase deductibles, co-payments and out-of-pocket health expenses for employees in an effort to offset the high cost of claims. The changes are effective Jan. 1.
Finance Director Steve Park said the city paid out $2.3 million in claims last year and placed $1.5 million more than budgeted into the plan during a two-and-half-year period.
“We’ve just had a lot of claims,” Park said. “I think it’s something everyone is looking at nationwide.”
Workers are growing older and more treatment options are available in an industry where inflation continues to surge, Park said.
“We’ve had bad years in the past,” Park said. “But normally we’d follow a bad year with a good one.”
In contrast, the city has weathered consecutive bad years, he added.
Tim Davis, chairman of Employee Benefits Administrators, said the city has been gracious toward its employees 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, according to Mayor Tim Walker.
In-network single deductibles increase from $300 to $500 and in-network family from $900 to $1,500 while out-of-network single deductibles increase from $600 to $1,000 and out-of-network family from $1,800 to $3,000.
Instead of one large increase, Davis proposed a series of incremental increases to avoid shocking employees.
Maximum out-of-pocket expenses 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 were raised from $20 to $25 and emergency room co-pays went from $75 to $250. Increasing deductibles, maximum out-of-pocket expenses and co-payments could have saved $45,400 on processed claims from Jan. 1 to Sept. 30, Davis said last week.
As part of the tweak, the council approved a change in prescription plan providers from CVS Caremark to HealthSmart Rx, which should save around $40,000, Davis said. A premium of $20 per month will be added for each person on the plan who smokes.
Park said all the money will be placed in the city’s healthcare trust fund, assuring residents the money will not be funneled into police cruisers or the Elizabethtown Sports Park.
If an employee’s spouse is offered health insurance through his or her employer, the spouse is ineligible for the city’s plan. 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.
The council also mandated the city’s wellness program for everyone under the plan, which entails a series of health screenings and tests. Recommendations on how to live healthier are made to employees, customized around the results of the screenings. Park said all but about 10 employees voluntarily participated in the wellness program last year.
Councilman Marty Fulkerson supported the changes but said the city needs assurances that it will address other problems, including the renegotiations of payments with Hardin Memorial Health with its acquisition of several independent practices. Fulkerson last week referred to HMH as a monopoly.
“They’re a higher cost provider,” Fulkerson. “That cost is going to go higher.”
Walker said the city has met with HMH officials and should have a recommendation for the council by January.
The health plan will be revisited next year with the intention of more changes, according to officials.
“This is not going to cure it all at once, but it’s baby steps,” Park said of the changes.
In other business
The city must pay $379,728 to the Kentucky Department of Fish and Wildlife Resources Stream and Wetland Mitigation Program as a permit stipulation for the purchase of 1,582.2 Adjusted Mitigation Units, which are used to measure stream mitigation. According to a letter issued last month by the U.S. Army Corps of Engineers, the units must be purchased before fill is discharged into U.S. waters.
The project is expected to impact 298 linear feet of Shaw Creek and 581 linear feet of a perennial tributary of Shaw Creek, which is an outlet of the main stream that flows throughout the year. Robert Bush, director of stormwater management, said the road extension will provide a rear entrance to Towne Mall and relieve congestion on Dixie Highway.
The city also approved a motion asking the Elizabethtown Tourism and Convention to pay all outstanding bills for the park’s construction above and beyond the $28.5 million in bonds the city financed. Poppe said there was about half a million dollars worth of bills to pay not covered by the bonds.
Marty Finley can be reached at (270) 505-1762 or firstname.lastname@example.org.