The city of Longview’s self-funded employee benefits plan is more stable than a year ago because of contributions and changes made by the city and workers, said Director of Administration Mary Ann Miller.
Miller talked about the changes during a benefits fair for employees this past week at Maude Cobb Convention and Activity Center.
“At this point last year, we had to go to City Council and ask for some money from the general fund balance to help us make it through a very difficult year with a lot of expenditures, and they made it very clear that we needed to fix the plan, so that is what we have attempted to do,” she said.
The city’s Group Health and Life Fund generated $12.42 million in net revenues — employee and city contributions — through the first 10 months of this fiscal year. That is about $2 million more than last year’s net revenues when the City Council funneled $1.5 million from other funds to shore up a nearly $3 million shortfall.
Administrators expect that those revenues will reach $13.71 million when this fiscal year ends Sept. 30, which would mark year-to-year increase of more than 30%.
Meanwhile, the city’s health expenses have dropped by $565,000, or 4%, to $12.54 million so far this year, and budget estimates are forecasting those expenses to drop another $210,000 next year.
The self-funded health plan is separate from the city’s general maintenance and operations, City Manager Keith Bonds said, but revenues come from city and employee contributions.
Strengthening the health plan last year was a joint effort of the city’s contribution — including $500 deposits into health savings accounts — but also more money from employees through premiums from their paychecks as well as a reduction in health claims, administrators said.
“In FY 17-18, employees put $1,748,848 into the health plan by paying for their premiums,” Miller said. “In FY 18-19, that number increased. We are projecting that at year end (Sept. 30), employees will have paid about $2,278,500 into the plan via their premiums. That is an increase of almost $530,000.”
Starting Oct. 1, 2018, employees were given the option of either joining the standard health insurance plan or opening a health savings account that comes with cheaper premiums taken out of paychecks but also higher deductibles — if they accepted health coverage at all.
The city agreed to add $500 into each health savings account chosen by an employee.
In the 2019-20 budget, employees with an health savings account will again get $500 placed into their account, but from the health fund itself — not from the city.
“This year, our health fund has done so well that we’re able to pay for that out of our health plan (but) not out of the general fund like we had to last year,” Miller said.
In 2017-18, the cost of health insurance for Longview municipal workers was $4.62 a paycheck for employee-only insurance or between $140 and $181 to insure themselves along with their spouse, children or entire family.
This fiscal year, the standard rate has increased about 10-fold for employee-only insurance. Employees choosing the standard rate with their spouse, their children or their family are paying about $51 more a paycheck, which comes to $1,326 more out of pocket for the year.
If an employee opened a health savings account, the rate increases on each paycheck have been almost $20 more for employee-only insurance and between $8 and $10 for family rates. However, employee-only deductibles are 80% higher — $1,300 more — than standard-rate insurance holders, and family deductibles are $900 more.
Of the city’s 844 employees, 58% chose the standard option, 35% opened health savings accounts and 6% waived health insurance altogether, Miller said.
Employees’ premiums and deductibles as well as the city’s contributions won’t change in the upcoming fiscal year.
Keeping employees mindful of their impact on the plan — particularly in how they value their health — will always be key to the plan’s success, officials said.
“One of the problems that we had last year during our most expensive year was catastrophic claims, and our medical claims were up last year in general, but our catastrophic claims were up by quite a bit,” Miller said, “and one of the things when we sat down with everyone, we talked about being healthy (and) mitigating those claims.
“Things are going to happen, and that’s what insurance is for, but if we can help with situations before they occur — diabetes, those sorts of things — that’s why we have a health clinic. That’s why we have the benefits fair,” she said, “helping our employees think about the need for insurance in a different way.”