By Ryan Richardson
WEBB CITY, Mo. —
The City Council on Monday night approved a contract with Benefits Management Inc. to serve as the city’s third-party administrator for the self-funded health care plan for city employees that cranks up June 1.
The administrator will negotiate rates for health care procedures and then provide a ledger to the city for the cost, according to interim City Administrator Carl Francis. The city is switching from a full-funded insurance plan to a self-funded plan to combat rising health care costs.
“We have faced double-digit percentage raises over the past few years,” Francis said Tuesday. “We want to be able to take advantage of good years so that we can save our money to our insurance fund, where before we would just be paying that out as a premium.”
Based on historical claim data, the city expects to save $98,000 in the first year. The city will pay claims up to $45,000 out of the city’s insurance fund.
Francis said there is some risk involved during the early years of the changeover.
“We realize the risk involved, but the alternative is not working,” he said. “We have done our research. We believe this is the best route.”
The council also agreed to vacate a portion of Webb Street, near Webster Primary School. The portion of the street will be vacated to make room for a storm shelter to be constructed for the school.