Sunbury Council takes hard look at insurance opt-out option

Thursday, November 26, 2009

By LENNY C. LEPOLA
News Assistant Managing Editor

In the past, any Sunbury Village employee was allowed to opt-out of village health insurance plans and would subsequently be reimbursed with a payment equaling one-half of the savings the village accrued for that employee’s non-participation in the program.

The philosophy was simple. If an employee had a spouse that was employed elsewhere, the incentive payment would encourage that employee to accept coverage under the spouse’s plan; and at the same time save the village money by not insuring the employee.

Currently, there is an ordinance at council, Ordinance 2009-29, that amends the village’s employee provisions statutes (generally referred to as the 139 statutes) that if approved would limit the employee incentive for non-participation in village health insurance to $2,000.

During last Wednesday’s Finance Committee meeting, village fiscal officer John Lane said lowering the opt-out incentive could cost the village an additional $80,000 during 2010 if employees who currently opt-out decide to come back on the village’s Medical Mutual health insurance plan; and that added cost would grow each year as insurance costs escalate.

Lane said he spoke with the opt-out employees and most indicated they would choose to return to the village’s health insurance plan.

During last Wednesday’s Sunbury Village Council meeting, Sunbury Police Department Officer Mark Meade addressed council members about the proposed changes to the 139 statutes.

“When the changes to 139 were being made, nobody involved in those changes discussed it with village employees,” Meade said. “The health insurance opt-out program is one of the few programs that saves the village money, and one of the reasons employees have been on the program is because it saves us money. My question is, why take away a program that saves the village money and saves employees money?”

Meade said most village employees felt they have been hurt by council actions in other ways during the past year and a half.

“One of the things that influenced my decision to come here as a full-time police officer was the opt-out incentive program,” Meade said. “Then last year you cut our raises, now you want to cut the opt-out program.”

Council member Dan Shaw reminded Meade that council doesn’t want to take anything away from village employees.

“But we are in the middle of a recession,” Shaw added.

Council member Robert Bishop said he would vote “No” on Ordinance 2009-29 when it has a third reading and a vote during the December 2 council session.

“We were supposed to have other meetings on 139,” Bishop said. “I don’t think we fulfilled our obligations on it and I don’t agree with everything that was in it.”

In a related insurance matter, Frank Harmon, Ohio Insurance Services, was in chambers to remind council members that in July they decided to finish 2009 with the village’s current Medical Mutual insurance plan and consider new products available in January of 2010.

“For 2009 you had a $102,600 exposure and paid $12,486,” Harmon said. “That 12 percent utilization is very good, and will make it possible to reduce your Medical Mutual monthly premium from $22,145 to $18,941 by switching your deductible from $2,000 to $3,000 per month.

“You will need to discuss how you want to fund that deductible increase,” Harmon continued. “Currently the village reimburses all but $100 of a village employee’s deductible. After $2,000, do you want to go 50-50, or 70-30?”

Harman also noted a small co-pay difference, doctors visits would go up from $20 to $25, and $50 for a specialist.

“Is that really a premium reduction?” asked council president Tommy Hatfield. “They lower their rates and raise our deductible?”

Harmon replied that some other services are covered 100 percent after the deductible, reducing the village’s potential exposure.

“The possibility of hitting your maximum exposure is decreased,” Harmon said. “Everybody can have a good year; everybody can have a bad year. Hopefully you’ll be status quo.”

Harmon said his visit was informational; no decision was needed immediately to implement a change in January.

He also noted there were insurance products from other carriers that were close to Medical Mutual in price, but he did not recommend a change.

“You’ve been with Medical Mutual for a few years; you’ve got your rates down,” Harmon said. “My philosophy is if you’ve got a carrier willing to work with you, if they’re within six, seven, eight points of other carriers, I don’t see any reason to change for a few percentage points.”

Later during the meeting, council members were scheduled to hold a third reading and vote on Ordinance 2010-01, the 2010 village appropriations package.

Lane said he prepared two versions of 2010-01. One version was the original document introduced on October 21, a second version was amended to reflect an additional $80,000 insurance cost if all village employees who currently opt-out of village insurance decide to come back on the plan.

Lane said he had no choice; that if the ordinance were amended to include the additional health insurance costs, he had to adjust the appropriations to reflect a worst case scenario.

Council members agreed to adopt the October 21 appropriations package and amend appropriations as needed and only when needed.

In his report to council, village administrator Dave Martin said Delaware County Commissioners unanimously approved a resolution for the village to move forward with the purchase of the new playground equipment for J.R. Smith Park using Community Development Block Grant funds.

To hear Sunbury Village Council members in action, listen to online streaming audio of council meetings by going to < http://www.sunbury-oh.com/ > and click on Schedule of Sunbury Public Meetings, then click on the MP3 link.

Sunbury Village Council meets the first and third Wednesday of every month at 7:30 p.m., third floor council chambers, Town Hall. Council committees meet one hour before regularly scheduled council sessions. All village council and council committee meetings are open to the public.