The city of Joplin's health care fund accumulated funding surpluses last year and so far this year.
That surplus gives the fund a surplus to withstand the potential for a year of high claims, the city's finance director, Leslie Haase, told the Joplin City Council on Monday night.
Expenses for this year are expected to be $5,720,100, which will leave the plan with a surplus of about $82,700. That brings the total reserve in the health care fund to $534,651.
But that cushion won't stave off expected increases in next year's contribution rates, Kim Wixson, a vice president of Segal Consulting, said. The city contacted the insurance consultant several years ago after experiencing double-digit increases in health insurance premiums.
Wixson told the council that 2020 city contribution rates for some employee insurance products are expected to go up. Medical and prescription drug rates are likely to increase 5.6% and dental will rise 5%.
Rates for vision insurance, life and accidental death and dismemberment insurance are not expected to change, Wixson said.
City contribution costs to provide employee insurance was $4.527 million this year and is expected to go up about $200,000 next year. A larger jump is forecast for 2021, when the cost is expected to be $5.123 million.
Employee contributions were $1,140,700 this year; $1,199,000 next year; and are planned at $1,278,500 in 2021.
Despite the increases, the city's self-insured fund is keeping the cost below national trends, Wixson said.
The city's costs rose 5.6% while the national trend was 6.8%.
Councilman Phil Stinnett questioned if the increasing cost in the public sector is contrary to the practice in the private sector of passing on a larger share of the premiums to employees.
Wixson said public sector employees tend to get more contributions to their insurance costs to make up for lower pay than the private sector. In the Midwest, public sector employees generally pick up about 26% of the insurance cost while the government employers pay 74%.
With the cumulative increase to the city over the next three years amounting to $600,000, Stinnett said, "I still think there is going to have to be a way to slow it down or freeze" further increases.
Haase said the cost increases will never stop. She said the city has collected data on what drives the costs and "we need to use that data and try to contain those costs in a better way."
A new health and wellness program for employees, Working on Wellness, has been started, and Haase said that growing that program might help curb some of the expense in future years.
The council will receive a contract for next year's renewal of the insurance policies at its next meetings and the costs will be detailed then.