Cost of Mehlville fire district benefits to decrease by $40,000

Cost of employee benefits totaled $1.69 million in 2004

By MIKE ANTHONY

Mehlville Fire Protection District officials project the cost of employee health benefits will decrease by roughly $40,000 next year.

Health, dental and vision insurance premiums for the coming year are projected to total $928,759.08 — $40,068.96 less than 2007’s total of $968,828.04, which was the district’s lowest cost since 1999.

Furthermore, the level of employee health benefits for the coming year will remain unchanged from this year — “concrete proof” that reforms enacted since 2005 are working, according to Board of Directors Chairman Aaron Hilmer.

Hilmer’s comments were made at the Dec. 6 Board of Directors meeting when the board voted 2-0 to approve employee health benefits for 2008. Hilmer and board Secretary Ed Ryan voted in favor of the employee health benefits while board Treasurer Bonnie Stegman was absent.

But Hilmer told the Call the board would re-vote on the employee health benefits today — Dec. 13 — because of “a clerical error” regarding the posting of the notice of the Dec. 6 meeting.

“On the day of the board meeting, it came to the board’s attention through an innocent clerical error that a meeting agenda was posted that had a different time than the meeting notice that had been on the (district’s) Web site for a few weeks,” he said. “So seeing that there’s a little conflict on that, everything we voted on at the meeting, we will re-vote on at our meeting on Dec. 13 just so that there’s no conflict.”

During the Dec. 6 meeting, board members discussed employee benefit proposals presented by Dean Eggerding, insurance sales director-vice president for the National City Insurance Group.

Free health, dental and vision insurance in which the district pays 100 percent of the premiums is offered to employees.

Until mid-2005, the district paid 100 percent of premiums for employees’ dependents. In 2006, the district paid 70 percent of the premiums for medical and dental insurance and 100 percent of the premiums for vision insurance for employees’ dependents. But in 2007, the district paid 50 percent of the cost of dependent coverage for health, dental and vision insurance.

For health insurance in 2008, the district plans to switch from current provider Group Health Plan to UnitedHealthcare at a cost of $839,959.56. GHP had proposed 17.50-percent increases in premiums for both the base and buy-up plans. UHC proposed decreasing premiums by 0.25 percent for the base plan and 8.25 percent for the buy-up plan.

For dental insurance, the district plans to switch from the current provider, Assurant, to Standard Insurance’s PPO Plus Plan 1 at a cost of $74,166.72. Assurant had proposed a 34-percent increase while Standard’s increase was 12 percent.

For vision insurance, the district’s carrier, Vision Service Plan, will remain unchanged at a cost of $14,632.80 for the second year of a two-year pact.

Last week, Hilmer noted that in 2004, the district was paying roughly $1.69 million per year in premiums for medical, dental and vision insurance. At that time, district officials were projecting that those premiums would increase to slightly more than $4 million per year by 2009.

Regarding health-insurance reforms, he said, “One of the biggest ones is the district only covered 50 percent of dependent coverage, not the hundred percent as previous. We instituted a $500 deductible. Previously, it was zero. We increased what was basically a trivial co-pay and drug card. We put a little larger nominal amount on those.

“We no longer gave free insurance to the employees’ children until the age of 26. We ratcheted that back. I think Dean told me where he was doing it, we found someone on there who was 27, but that’s a story for another day, I guess.

“So did those reforms have any effect? Our 2008 renewal is going to be slightly less than a million dollars — a number which sounds familiar to Bonnie because that’s about exactly what we paid last year. So we got no increase — there will be no health-insurance increase for the employee while leaving their benefits unchanged and no in-crease for the district. So I thought that was a pretty interesting number to see. We’re at a million dollars versus their projected $4 million. This is concrete proof that those reforms worked, and actually if an employee’s on the buy-up plan, they’re going to see a 9-percent decrease in their health-insurance rates for this year (2008) …”

Noting that it’s clear the reforms worked, he said, “… What I would like to introduce for next year — I’d like your approval on this — is what we call a high-deductible health plan, a health savings account or an HDHP/HSA … This is something that’s going to be optional. We’re not going to force employees into this this first year, but I would think by 2011 we should be able to have it fully mainstreamed to be what the district offers …”

Regarding the health savings accounts, Eggerding said, “… The other thing that we’re proposing to be done is that some seed money go into the HSA. HSA plans are set up kind of like plans were years and years ago that it’s deductible — it has a high deductible and then co-insurance kicks in. There’s absolutely no co-pays that ever kick in. The one we’ve been looking at is a $3,000 individual deductible, $6,000 for the family. Once that deductible is met, nothing else can be — nothing else can be paid out of pocket. Like I said, there’s absolutely no co-pays …”

As an incentive, Hilmer proposed a $1,500 contribution for any employee opting to participate in an HSA.

He later said, “… What I think’s interesting here is that actually in the first year if say everybody took it — let’s say every employee elected this — it would actually cost the district more in the first year than it is under our present renewal. But that’s part of getting these things out there. So you have the high-deductible insurance part, but then you have — they have an opportunity to put money into the HSA, the health savings account.

“And I think one of the big differences for the employees is presently we pay 50 percent of family coverage — that’s one of the changes. If an employee elects the HSA, we will pay the whole hundred percent of (dependent) coverage. For instance, if someone has a family plan right now, they’re taking $4,000 a year out of their paycheck to pay for their family plan. That would become zero. But then they have that larger deductible, so now they should take that money and put it into their (health) savings account …

“Here’s an interesting example for the buy-up plan that an employee pays $6,700 out of his pocket for his family and himself. Well, under the high-deductible insurance, the most you could ever spend is $6,000. So you see it’s actually — immediately you would save that person that money per year.”