Employee health benefits for 2009 were scheduled to be approved earlier this week by the Mehlville Fire Protection District Board of Directors.
The Board of Directors was scheduled to meet Monday night — after the Call went to press — to consider approval of health, dental and vision insurance premiums totaling roughly $946,000 for 2009.
During a meeting last week, board members discussed employee benefit proposals for 2009 presented by Dean Eggerding, insurance sales director-vice president for the National City Insurance Group.
Health, dental and vision insurance premiums for the coming year are estimated to total $946,271 — $17,013 more than 2008’s projected total of $929,258, but $22,557 less than the $968,828 paid in 2007.
Free health, dental and vision insurance in which the district pays 100 percent of the premiums currently 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 2009, the district plans to remain with current provider UnitedHealthcare. As projected, the 2009 premium would be $858,246, up from the estimated 2008 total of $844,756.
The district now offers a base plan, a buy-up plan and a high-deductible health plan/health savings account, or HDHP/HSA, for health insurance. Board Chairman Aaron Hilmer said at the Nov. 24 meeting that the board is proposing to eliminate the buy-up plan while raising the district’s contribution to the HDHP/HSA plan to $2,000 — a $500 hike over the current contribution of $1,500.
“For 2009, we’re proposing to eliminate the buy-up plan because after running numbers on it, it became clear there were people actually spending more money on that buy-up plan than they would if they’d gone to the HSA,” Hilmer said. “So we’re going to eliminate that. That would be for — obviously employees would — it’s going to actually save them money by doing that and then we are left with the base and the health-savings account plan.
“Dean (Eggerding) will cover a couple of the small changes on the office-visit co-pay and then the prescription drug card — some slight upward movement there.
“Health-savings account obviously stays the same, but we’re going to increase the contribution we make to their account to $2,000. And the only other change is, as we talked about last year, we wanted to look at perhaps a three-year plan where the district would push toward all HDHP/HSAs. As we reviewed the base plan, especially for the employee only, it became clear there wasn’t a real good incentive for some of them to slide over there. It wasn’t really a cost-neutral thing. So what we’re going to propose this year is that presently the district pays 100 percent of the employee-only coverage for the base plan. We would go to a 90 percent on that, but because we’re increasing the incentive to $2,000, as they slide over, they’ll see no change in cost.”
In reviewing the health plan’s loss-ratio history, Hilmer noted that in 2004, “Roughly for every dollar spent on premiums, 92 cents was going to claims. By 2005, 91 percent. 2006, 93 percent. 2007, 70 percent. Projected for 2008 will be a 62 percent. So we’ve dropped almost 40 percent off as far as our claims to premium and that’s why we’re able to have such low, single-digit increases …”
He later said, “… For 2009, we will see how because of the employees’ buy-in to our health-care reforms, we will be able to give them an increase in the amount that was given to them for the health-savings account incentive. Last year when we launched the HDHP, high-deductible health plan, pared with the health-savings account, we not only said: Hey, we’ll pay for your entire family’s coverage on here, we also will give a $1,500 contribution to their account. This year, I’m going to recommend that we increase it to a $2,000 (contribution). Roughly last year, we had a third of the employees signed up for the program. They were the trailblazers, if you would, and they’re actually going to see I guess you could say a $500 pay increase … that will go into their account.
“How is something like this possible? I think some of the things we can look at (are) the fit-for-duty program we put in place — all things that encouraged a more healthy wellness environment. As we go into the early part of next year, we’ll be looking at other types of wellness programs — BMI, body-mass index, programs, et cetera. So for 2008, we’re paying roughly $840,000 for medical coverage. Now that’s not with the dental or the vision part … For 2009, we’re projecting $860,000 … That number could rise some, though not substantially, if more people sign up for the health-savings account, whereby we’ll be giving them the $2,000 bonus …”
For the HDHP/HSA, participants have no co-pays whatsoever with a $3,000 individual deductible and a $6,000 family deductible.
Among the changes to the health-insurance plan are a lifetime maximum of $5 million in benefits, Eggerding noted.
“That’s a change that UnitedHealthcare has made across the board,” he said. “That’s a lifetime maximum per person enrolled in the plan, so that’s not a family lifetime maximum. Anthem has done that same thing actually as well on their programs … The office visit co-pay would go to $25/$50 on the base plan. Currently, it’s a $25, which means for any primary-care visits, the person would continue to pay $25. For specialists, they pay $50. And the drug card is currently at $10/$25/$40. It would go to a $10/$30/$50. The $10/$30/$50 drug card is the standard drug card that United Health-care has now as their out-of-the-gate, out-of-the-box, if you will, drug card that they use. The tiering will remain the same from the standpoint that if the drug is currently at tier two, it will remain at tier two … By making those changes to the base plan, it’s roughly a 6-percent savings to the cost of the base plan. The other thing that’s probably worth mentioning on the base plan, prior with Group Health Plan, the base plan actually had a drug card at that time of a $12/$30/$55. So it’s pretty similar to what was in place two years ago …”
For dental insurance, the district plans to switch from the current provider, Standard Insurance, to the previous provider, Assurant, at a cost of $73,393, up from $69,870 for 2008. Standard had proposed an 18-percent increase while Assurant’s increase was 5 percent. For vision insurance, the district’s carrier, Vision Service Plan, will remain unchanged at a cost of $14,632.