October 07, 2008 10:16 pm
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By Debby Woodin
dwoodin@joplinglobe.com
A plan that would keep city employees’ health-insurance benefits about the same as they currently are and limit next year’s premium cost for taxpayers was agreed upon Tuesday night by the Joplin City Council.
The council voted 8-1 to accept a plan offered by Humana that will increase the city’s cost by $225,000 next year. That will make the city’s total payment to cover all of its employees about $2.725 million, up from $2.5 million this year.
The city’s current carrier, United Healthcare, saved the city about $268,000 on its bid last year for this year’s coverage, but it wanted a raise of about $300,000 for the same coverage for next year.
The Humana bid offered to cap its increase for a second year of coverage at 12.9 percent. In past years, the city has faced increases of up to 17 percent.
By accepting the Humana bid, the council rejected 33 other bids by a half-dozen companies and membership in a health consortium pool offered by a Springfield insurance broker through the Joplin Area Chamber of Commerce. That pool, called the Joplin Chamber Health Association, would have cost the city $2.1 million more than it paid this year, the city’s finance director, Leslie Jones, told the council.
The lowest bid, in terms of a cost increase to the city, was submitted by Coventry. It would have cost about $99,400 more than the city’s current cost, but its deductibles, co-pays and pharmacy co-pays for employees were higher.
The Coventry bid also would have required employees to switch to St. John’s Regional Medical Center from Freeman Health System as the preferred provider. Jones told the council that the majority of city employees, surveyed last year, preferred to stay with their existing providers rather than having to switch doctors and hospitals. Some would prefer St. John’s, she said.
Council member Melodee Colbert-Kean voted against accepting the Humana bid, saying she supported the reduced cost to the city of the Coventry bid.
The Humana insurance would cost employees $266.45 for single coverage and $746 for family coverage per month if they paid all of the premium themselves. Under the current United Healthcare coverage, monthly premiums are $299 for single people and $643 for family coverage.
But, the city pays all of the cost for a single individual and all but $143 a month for family coverage.
Jones told the council that the city has traditionally picked up most of the cost of health insurance to offset paying lower wages than private-sector jobs.
The city’s cost for insurance coverage also will go up because more employees are to be hired in the police, fire and public works departments, raising the number of covered employees from 425 to about 450 next year, Jones said.
Councilmen Phil Stinnett, Jim West and Bill Scearce all said they favored the Humana bid because of the company’s offer to cap the rate for second-year coverage. The exact cap would be a 9.9 percent rate increase with a 3 percent benefit buy-down, or decrease in benefit coverage.
“I sell health insurance, and I can tell you that 9.9 percent rate is pretty good,” Scearce told the council.
Stinnett made the motion to accept the Humana bid, and West seconded the motion.
COBRA coverage
Retirees also are eligible for the coverage under the federal Consolidated Omnibus Budget Reconciliation Act by paying the full monthly rate plus a 2 percent administrative charge for up to 10 years after they leave city employment. Many drop out when they become eligible for Medicare, said Reba Snavely, the city human resources director.
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