BY KRISTEN BUCKLES
Greene County began taking a hard look Wednesday at employee insurance for 2013-2014 in light of changes implemented by the U.S. Affordable Care Act (ACA) and other anticipated cost increases.
The ACA, commonly known as Obamacare, will take effect at the July 1 opening of the 2013-2014 fiscal year, bringing with it new taxes and fees that may worsen the county's financial situation in the coming year, county insurance broker Jim Jordan informed the Greene County Insurance Committee.
"The ACA contains a number of fees and taxes that will affect the cost of health care for employers during the next several years. While the exact cost may differ for each employer based on location and the type of benefits it offers, on average, employers are expected to see a substantial increase in costs," according to a UnitedHealthcare document Jordan provided the committee.
Concern has grown among committee members over the past several months as Jordan and Budget Director Mary Shelton have frequently reported increased claims.
In 2011, the county made the move from being fully insured under BlueCross BlueShield to being self-insured.
With that decision, the county also switched to UnitedHealthcare as the insurance carrier for record-keeping and "reinsurance," or excess insurance for liability coverage.
In addition, the County Commission approved opening a County Clinic, which TransformHealthRx operates in the Courthouse Annex.
The clinic is a free service for routine and non-emergency office visits. The clinic also offers generic prescriptions at no cost to employees and their beneficiaries.
Both the clinic services and the self-insurance are available to all non-school county employees. (The Greene County School System operates under a separate, state-run policy.)
The county reported considerable savings from the move to self-insurance at the close of the 2011-2012 fiscal year.
Jordan previously revealed that paid claims from July 2010 to May 2011 totaled $3,812,000, while those from July 2011 to May 2012 totaled $3,334,700.
By the close of May 2012, however, Jordan was already reporting a "turn upwards" in the claims.
"All of us are aware that the claims are up and the cost for the insurance is going to have to be addressed," Mayor Alan Broyles said.
"It's a concern of ours as to how we are going to pay for it."
CLAIMS AND SAVINGS
On Wednesday, Shelton told the committee that claims continue to fluctuate, but generally average about $60,000 per week.
Within the past week, claims have totaled $98,000, while the week before saw $26,000, she said.
Within the last six months, the county has paid a total of $1,884,600 in medical claims, according to Shelton's monthly report on the Employee Insurance Fund.
Additionally, the county has paid $394,000 in liability claims and $57,000 in other self-insured claims over those six months, according to the monthly report on the Workmen's Compensation and Liability Fund.
The committee approved both reports, as well as a report on the County Clinic, in which TransformHealthRx indicated operational costs for the clinic at $200,700 for the 2012 calendar year.
The report estimated savings by comparing the actual cost to the estimated cost had the services been billed to the self-insurance plan. Savings for the 2012 calendar year were estimated at $695,600.
'USE LESS BENEFITS'
In order to increase these savings and decrease costs associated with claims made against the self-insurance plan, Jordan recommended that the committee research means to encourage employees to lessen their usage of the benefit plan.
Among the options Jordan presented were:
* encouraging and incentivizing use of the County Clinic;
* increasing prescription and office visit co-pays when using the benefit plan instead of the clinic;
* implementing wellness programs to encourage healthy lifestyles and incentivizing participation and/or penalizing lack of participation;
* consider benefit plans such as the Tennessee local government plan;
* actively inform employees of the cost for health services through alternate benefit options such as a Health Reimbursement Arrangement or Health Savings Account;
* fixing costs by capping the county's intended total contribution, contribution per employee, or percentage of premiums the county will pay.
"We've almost been sheltered from [the cost of our healthcare] because we have insurance," Jordan explained. "It's like a credit card, really. No one knows the cost."
Jordan concluded his report by informing the committee that the plan will lose its "grandfathered" status due to the new requirements brought about by Obamacare that employer plans cover all employees' dependents who are under 26.
Moreover, among the new fees will be a $1 per member, per year fee for the Patient-Centered Outcomes Research Institute, which is researching "comparative effectiveness of medical treatments," according to information Jordan presented.
The county will now also incur a $6 per member, per month fee for reinsurance "to spread the financial risk across all health insurers," the information stated.
While Obamacare also gives the county the option to no longer provide health insurance at about a $670,000 penalty, Jordan said, members of the committee speculated that this number would increase quickly and would not be to the benefit of employees.
Jordan agreed to present further information and cost analysis for various benefit packages during the committee's February meeting.