MFPD board eyes approval of employee health benefits for 2010

Offering one plan would cut premium increase to 16.62%

By EVAN YOUNG

Approval of employee health benefits for 2010 is scheduled to be considered today — Dec. 10 — by the Mehlville Fire Protection District Board of Directors.

Board Chairman Aaron Hilmer told the Call Monday he plans to recommend the fire district offer only a high-deductible health plan/health savings account, or HDHP/HSA, to employees for health insurance — eliminating the district’s base plan — and obtain health, dental and vision insurance through UnitedHealthcare.

The district began offering HDHP/HSA in 2007 along with the base plan and a buy-up plan, but since has moved toward offering only the former option to employees, Hilmer said. The board voted in 2008 to eliminate the buy-up plan.

Hilmer said he also will recommend the district reduce its contribution to employee HSAs next year to $700 from $2,000. This action, combined with eliminating the base plan and moving all lines of coverage under UnitedHealthcare, will keep next year’s insurance costs essentially “budget neutral,” he said.

UnitedHealthcare is the district’s current health insurance provider, while Assurant and Vision Service Plan provide its dental and vision benefits, respectively.

During a presentation of insurance options to the board last week, Elaine Kilker of National City Insurance Group noted that, due to several large claims this year, the fire district’s claims-to-premium ratio jumped to nearly 89 percent from 53 percent in 2008.

“You have four large claims that are ongoing, which made UnitedHealthcare a little nervous this year,” Kilker told the board.

UnitedHealthcare initially proposed a 25-percent increase to renew health coverage for 2010, but that eventually was negotiated down to a 19-percent increase, she said.

However, the district would see only a 16.62-percent increase if it offered solely HDHP/HSA, she said, noting that only 19 employees currently use the base plan.

“UnitedHealthcare will actually give you a discount of two-and-a-half percent to just offer one plan, and we would suggest that this is the time to do that,” Kilker said. “By doing that you would actually save approximately $70,000 over the course of the year by going strictly to an HSA.”

If the district continued to offer employees both the base plan and HDHP/HSA next year, the annual health insurance premium would increase to $870,396 from $731,424 in 2009.

By offering only the HDHP/HSA, however, the annual premium would increase to $800,953.

With a strictly HDHP/HSA program, employees would continue to see zero copays, 100 percent of their premium paid for by the district and a $700 district contribution to their HSA toward their deductible, which would remain at $3,000 for an individual and $6,000 for a family, the board chairman said.

“Three years ago when we started offering the HDHP/HSAs, I kind of thought that within three years we could be 100 percent offering them. And so we’ve kind of accomplished that goal, somewhat out of necessity but also because that was part of the plan,” Hilmer said at last week’s board meeting, noting that at one time the district offered “six to eight different options” for medical coverage. “So now we’re down to one option — this is what you get, and it’s really good.

“And quite frankly, if someone took advantage of the (HDHP/HSA) offer three years ago, they would’ve received $1,500 from us then, along with $2,000 last year. And that’s a little less this year, but that’s why we made those available back then.”

The district would receive an additional discount by switching to UnitedHealthcare dental and vision insurance, Kilker said.

“If we put the dental and the vision with UnitedHealthcare — and I compared the benefits and they’re similar benefits — we could actually get a multiline discount by doing that,” she told the board. “What United will do is give you $5 off per employee per month for each line of coverage.

“So I would suggest we put it all under the umbrella of UnitedHealthcare … The vision I was not able to match up exactly, benefits-wise, but it’s still very, very good coverage and comparable.”

The additional savings for switching dental and vision insurance providers “equates to approximately $15,000,” she added later.

For dental insurance, Assurant’s annual premium for 2009 was $105,712 and is expected to increase by 70 percent to a projected $180,134 in 2010. By switching to UnitedHealthcare, the district’s annual premium is projected to increase by only 32 percent, to $139,622, in 2010.

For vision insurance, Vision Service Plan’s annual premium for 2009 was roughly $14,600. Its projected 2010 annual premium was not available at press time, but UnitedHealthcare’s estimated 2010 annual premium would be either $17,650 or $21,893, depending on the benefit level selected.