BUCKHANNON – Buckhannon City Council on Thursday directed its attorney to craft an ordinance that would implement several changes to the city’s health insurance that could yield a sizable annual savings.
The cost-saving measures council considered are part of a larger proposal mayor David McCauley presented at city council’s special May 23 meeting. At that meeting, council voted to switch from a fully funded health insurance plan through Loudin Insurance and its carrier Highmark Blue Cross Blue Shield West Virginia to a partially self-funded plan.
City officials say the new plan through Tawney Insurance & Consulting in Lewisburg, W.Va., has the potential to save Buckhannon somewhere between $115,000 and $200,000 annually. And on Thursday, mayor David McCauley projected the general policy changes – including spousal carve-outs – could save the city approximately $150,000 annually.
“We took up at our last special meeting the action on city health insurance,” the mayor said at Thursday’s meeting. “There were several matters in the statement that I gave at that time that council said, ‘let’s just wait and take it up on June 6.’ These are important matters that I’d like to take up with you.”
Although council rejected McCauley’s recommendation to maintain insurance with Loudin Insurance Agency at the May 23 meeting, on Thursday, the body voted to adopt four prongs of his six-prong proposal – items 3-6.
McCauley said in order to enact the policy changes, council would have to approve them via a two-reading ordinance.
“We project that there will be substantial additional savings relative to our health insurance as a consequence of the implementation of these measures,” McCauley said. “It’s my recommendation that we adopt these.”
Included in the items approved Thursday is directing city attorney Tom O’Neil to draft an ordinance that would establish spousal carve-outs for future city employees, i.e. those hired on or after Oct. 1, 2019. Although spousal carve-outs wouldn’t be applicable to current full-time employees, they mean future employees would have to disclose whether their spouse could obtain health insurance through her or his own employer.
If a current or future spouse could obtain health insurance through her or his own employer, the spouse would not qualify for coverage under the city’s plan.
The second recommendation is for the city to implement tiering of health insurance benefits for newly hired employees – again, on or after Oct. 1, 2019. If an employee has a spouse or other dependent eligible for coverage through the city, the employee would be responsible for footing 20% of the premium cost.
Additionally, until a new health insurance ordinance is approved, there will be a moratorium on hiring any new full-time employees – with the singular exception of a position at the Stockert Youth & Community Center for which applicants were recently interviewed.
The final prong of the proposal calls for council’s insurance committee – comprised of councilman Robbie Skinner, McCauley, finance and administrative director Amberle Jenkins, councilman David Thomas and city employee Barb Hinkle – to be a permanent, standing committee that would regularly advise council on insurance-related issues.
Councilwoman Mary Albaugh made a motion to adopt the four recommendations, which was seconded by councilman CJ Rylands.
Councilman Robbie Skinner asked a question about whether “grandfathered employees” – i.e. full-time employees hired prior to Oct. 1, 2019 – could opt to decline health care coverage for their spouse or take part in the spousal carve-out.
O’Neill said any employee could opt out of spousal coverage.
“If you want to make it a voluntary thing for grandfathered employees, that option exists currently,” O’Neill said. “Any employee has the ability to decline coverage for their spouse if they so choose.”
Councilman David Thomas asked about an employee’s dependents or children.
“Under the Affordable Care Act, we could not tell an employee that they could not include their children on their policy if those children could be covered by their spouse,” O’Neill answered. “You don’t have the legal ability to do that, so we have to cover the employee’s children even if the employee’s children can be covered under the spouse’s policy – that’s up to them, whether they go under the city’s policy or the city employee’s spouse’s policy.”
McCauley emphasized council is likely to see significant savings relatively soon, saying that within the next five years, the City of Buckhannon is likely to experience the loss of up to 25 percent of its current staff due to retirement.
“So, the savings – while there will be some realized in year one – the savings by the new design with spousal carve-outs and tiering will substantially, in the next five to 10 years, reduce our insurance premiums dramatically.”
“Amby and I have looked at the numbers, and we’re projecting $150,000 a year in savings in a relatively short period of time,” the mayor added. “That’s $150,000 bucks we could be building new sidewalks and paving more streets and all those other things we want to do as an entity.”
Council unanimously voted to authorize O’Neill to draft an ordinance that would implement the changes.
Councilwoman Pam Bucklew was absent.