As a result of lower-than-expected premium increases for Sun Valley’s employee health, dental and vision insurance plans, the City Council has voted unanimously to renew the city’s current plans and to pass on to city employees the savings of about $5,400.
The council approved the renewal at a meeting on Thursday, March 7. At the meeting, Mayor Dewayne Briscoe said he hoped the council would renew the city’s current plans because that would keep its benefits offerings as “stable” as possible. He said that would limit concerns from current employees and potential new hires that costs or coverage might change in the near future. The plans would have expired on April 1.
In August, the council amended the city’s tentative fiscal 2013 budget to make employees collectively pay 10 percent of the city’s health, dental and vision insurance premiums. Councilman Bob Youngman said then that “spreading the monthly pain” among the employees would help keep premiums down because the employees would have some “skin in the game.” The employees began contributing to the plans on Jan. 1.
The city’s fiscal 2013 budget anticipated premium increases of 7 percent, but a staff report included in the meeting packet states that health insurance premiums would go up 4.4 percent, dental would go up just 2 percent and vision would stay the same.
The packet states that assuming the city renewed those plans, premiums would increase by only about $14,500 for the plan year, about $7,600 of which would fall in fiscal 2013. According to the packet, that would result in a budget savings of about $5,400.
At the meeting on March 7, Councilman Nils Ribi suggested passing on the savings to the employees, distributing it based on how much each employee earns.
“It’s only fair,” he said.
However, Youngman disagreed, saying some residents are concerned about rising health care costs, and the savings should be kept by the city. He said he would be willing to make an exception in this case, but that the council should adopt a policy that outlines what it will do with savings in the future. Councilman Franz Suhadolnik agreed that the city should adopt such a policy, but was also willing to approve Ribi’s suggestion in this case.
According to Finance Manager and Treasurer Angela Walls, the city currently provides health insurance through Regence BlueShield of Idaho, dental through MetLife and vision through Vision Service Provider.
“We’re delighted to know we can keep our current plans with such a small increase,” Briscoe said in an interview after the meeting.
City rejects struggling self-insurance pool
At the meeting, Briscoe said premiums for a self-insurance pool of Idaho cities had ballooned in the last year, making the low premium increases for the city’s current, private sector plans seem even smaller in comparison. He recommended against joining the pool for those reasons and said renewing the city’s current plans was really its “only” option.
The Idaho Independent Intergovernmental Authority Trust, or Triple I-A, was launched in March 2012 and has struggled to remain solvent during its first year of operation. It was modeled after a similar pool that Triple I-A Chair Gary Marks, who is also Ketchum’s city administrator, helped start in Montana in 2004. Hailey and Ketchum joined the Idaho pool along with 39 other cities, but Sun Valley did not.
In an interview, Briscoe said the city decided against entering the pool last spring because it was too “new and unknown” and its three-year commitment seemed too long given the uncertainty.
Though the Montana pool has succeeded in reducing premium costs for cities in that state and in saving about $9 million in reserves, the Idaho pool received an unexpectedly high number of expensive claims within its first 40 days of operation, which led to high premiums for participating towns. In January, Hailey and five other participating towns signed a letter seeking to leave the pool without paying an early withdrawal penalty. Three cities—Rigby, Shoshone and Jerome—have left the pool.
Marks said at a Ketchum City Council meeting on Feb. 19 that claims have stabilized since last spring and the pool will be solvent enough to offer a 23 percent rate cut in July.
“We hope Triple I-A works out and we might consider it in future years if it all works out to the benefit of the cities,” Briscoe said in the interview.
Brennan Rego: email@example.com