BUCKHANNON – City of Buckhannon officials say when it comes to providing quality health insurance to their employees – while simultaneously delivering vital services to citizens – it’s a budget balancing act.
On one end of the scale are the city’s 85 full-time employees, who understandably expect the municipality to provide high quality health insurance coverage; on the other end are the taxpayers who have entrusted the city to be fiscally responsible with their money.
Across the nation and state, the cost of health insurance keeps climbing, and in response, the city’s insurance committee – and council itself – has decided to explored what mayor David McCauley called a “semi-self-administered health insurance plan” through agent Kris Tawney with Lewisburg-based Tawney Insurance and Consulting LLC.
At council’s meeting Tuesday, May 14, McCauley explained why the city’s contemplating switching from its current provider, Loudin Insurance Agency in Buckhannon, to a partially self-insured plan.
“We are in this repetitive, cyclical, endless situation for the last seven or eight years where our insurance premiums have gone from about a half-a-million dollars a year to $1.18 million – that’s what we expended on health insurance for those employees who are covered for this past year,” the mayor said. “It just continues to go up.”
The upwards trend is resulting in the city having to pay out approximately $100,000 more each year than the previous one to provide insurance to those 85 employees.
“Once you start getting to over a 1 million bucks a year, to continue to put out $100,000-plus of our precious revenue and our taxpayers’, fee payers’ monies towards health insurance, we cannot continue to sustain that model,” McCauley said.
He went on to say that the city’s working hard to strike a balance between using city funds in a fiscally conservative manner and “trying to do the right thing by our employees.”
City officials have been in discussions with both Jamie Powell of Loudin Insurance – the city’s current provider – and Tawney, and Powell will present the city’s insurance committee with one final proposal next week.
That committee is made up of councilman David Thomas; councilman Robbie Skinner, an insurance agent with Mountain Lakes Insurance Agency; McCauley; city finance and administrative director Amberle Jenkins; and city employee Barb Hinkle.
“In order to have a completely level playing field, as we consider going to a semi-self-administered insurance plan, we’re going to hear one more time from Loudin Insurance early next week, and I would like to schedule a special meeting of council for next Thursday — Thursday, May 23 — at which we would make our decision after members of the insurance committee and Mrs. Jenkins report to the entire council about these matters.”
Self-insurance means as an employer, the city would assume the financial risk of providing health care benefits to its employees. Typically, self-insured employers cover the cost of each claim out-of-pocket as they are incurred instead of paying a fixed monthly premium to a third party carrier, according to the Self-Insurance Institute of America, Inc.
Another local government body has already gone the self-insured route — Upshur County is wholly self-insured, having left PEIA several years ago.
Council members stressed the health benefit packages of its full-time employees won’t change should the city opt to switch to a partially self-insured plan; however, there would be substantial tweaks to new hires’ packages.
“It would be complete grandfathering for all current employees,” McCauley explained. “We anticipate that within the next two, three, four, five years, 20-25 percent of our workforce … will retire. That’s great and we’re happy for them that they’ve reached this point in their careers, but as we hire these new folks, it will allow us to be more cost-conscious going forward.”
“We’ve been bandying about this idea that as of Jan. 1, 2020, that new hires coming into the city’s employ would be required to participate in the payment of spousal and family insurance. We’re also looking at a carve-out,” he added.
A “carve-out” mandates that city employees must disclose whether their spouses have health insurance available through their own job, and if so, they’re required to maintain coverage through that employer.
“If we could adopt this carve-out measure – it would require us to do it via an ordinance – it could save us maybe another $200,000 a year,” McCauley said, emphasizing the carve-out would only be applicable to new hires.
Skinner said the bottom line is the city can’t continue to absorb 10 percent increases on an annual basis.
“The point is, as the mayor pointed out, that we cannot continue to accept 10 percent after 10 percent after 10 percent after 10 percent increase … when you’re north or at $1 million, that’s $100,000 increase every single year,” he said. “We have a fiduciary responsibility to provide the absolute best coverage to our employees.”
“We value our employees,” Skinner continued. “We want to provide them with the absolute best coverage in the marketplace, but we also have a responsibility to the taxpayers of this community. We must do the best we can to save the taxpayers money, and I believe that we’re doing that with this exercise. I’m happy that we’re having this conversation.”
McCauley said he thinks the city’s insurance committee needs to meet on a regular basis, and Skinner and other council members agreed.
In other news, Mary Dean with the Buckhannon-Upshur Work Adjustment Center appeared before council to announce the center is partnering with the West Virginia Division of Rehabilitation Services to host a career opportunity exploration seminar June 25-28 from 9 a.m. to 4 p.m. in the Public Safety Complex’s Community and Training Room.
Dean said a variety of topics – including skills assessment, tips on how to prepare a resume, the important of a positive attitude and developing a job search plan – will be covered.
The seminar will be for youth and adults ages 14-21.
“We will be inviting some people to speak about various employment opportunities, sharing in some fun exercises such as team-building and role-playing and some of you just may be asked to volunteer,” she told council. “We appreciate the city allowing us to use the Public Safety Complex’s Community Training Room to provide positive support and encouragement to young people seeking gainful employment.”