Crestwood officials to investigate consolidating insurance carriers

By Kari Williams

Crestwood officials plan to investigate the possibility of consolidating insurance carriers to determine if it would be a financial benefit to the city, according to Mayor Jeff Schlink.

Schlink said the city is not on a calendar year for its health insurance, but rather midyear.

“One of the possible options is to take our health insurance and only do a six-month bid, which then gives us more time to appropriately vet any other carriers or any other brokers that we have,” Schlink said.

Finance Officer Greg Kremer said the city’s current broker has tried to mitigate increasing health insurance costs through buying a higher deductible.

“The way that a city’s health insurance plan works is basically the entire deductible outside of $1,000 is reimbursed back by the city …,” Kremer said. “As we continue to increase that deductible, obviously the liability to the city increases.”

In the past, roughly $35,000 has been budgeted for deductible reimbursement, according to Kremer, and in the 2013 budget, $60,000 was budgeted.

“We’re going to continue see that increase cost on the deductible side, while still trying to mitigate lower premiums to the city,” he said.

Schlink said he would recommend considering a six-month health insurance contract when it comes due this summer so city officials have more time “to do a full analysis of all the insurances that we provide and try to align the coverages together so it’s a little bit easier for employees.”

“Even though the coverage goes from mid-year to mid-year, the deductible that you’re counting is really in the calendar year,” he said. “So we’re really out of sync with the way not only most companies handle it, but the normal way for a family to budget and look at the way the dollars are being spent …”

City Clerk Tina Flowers said all of the city’s other insurance, such as workers’ compensation, property and liability, are also on a six-month contract.

Schlink said even though the intention is to address the problems Kremer mentioned, “that doesn’t mean that we’re going to be successful.”

“We’re very limited as far as the number of carriers we have,” Schlink said. “While we’re hoping that we have this window carrying it through to the end of the year, for that six month period that we can make some positive impacts … but what’s more important is the path that we’re going down now and the way that we have been trying to reduce the premium that we pay on behalf of the employees by bringing in that higher deductible. The result really is opening the city up to much more liability.”

If it turns out the six-month option has a higher premium, Schlink said the city will “look at it differently.”

“But as of now, this is a strategy that we’re going to consider and really just making the board aware of and the residents as well aware of what we’re trying to do,” Schlink said.

There have been a few “fact finding and meet and greet meetings” with other carriers to see if what the city is considering is possible, which Schlink said it is.

“I would like for now that we have (City Administrator Mark) Sime on board for us to move forward in a more aggressive manner and probably one with an actual direction and a goal, objective to try to help out the city and as well try to benefit the employees hopefully we can do that,” Schlink said.