United Healthcare is the county’s plan administrator, but the claims are all paid out of county coffers. There is a single claim limit of $175,000 and a total limit $20.8 million, so any bills over those amounts are paid by UHC.
County Administrator Judy Boyko said health insurance costs are driven by not only the claims but claims history.
“When we originally quoted the renewal proposal at 14 percent, that was with United Healthcare for about six months worth of data through June,” Boyko said. “As the year continued and we received more of our claims utilization data, then United Healthcare’s ability to trend our experience resulted in that lower (increase).”
Elsewhere in the county, Fairfield, Hamilton, Middletown, Oxford and Liberty Twp. are also self-insured. The commissioners went to self-insurance so they could have more control over the costs. Oxford City Manager Doug Elliott said his city took a 50 percent rate hit because of their claims experience, but in 2015 the insurance costs dropped 3.5 percent. The five-year average increase for Oxford was 11.5 percent.
“In an indemnity program where an insurance company is taking all the risk, typically your premiums are going to be higher, but there’s probably more stability in the claims,” he said. “But when you’re self-insured you’re going to have highs and lows because you’re basically managing that risk.”
West Chester Twp. has chosen to use an insurance company to cover insurance for 227 employees who participate. The largest year-over-year increase there was 10 percent last year, but the trustees recently approved a $4.9 million plan for 2020 that is only 3 percent higher than this year.
Assistant Township Administrator Lisa Brown said going self-insured doesn’t make sense for the township right now.
“It has just not made financial sense to this point, we continue to look at various options to keep our insurance rates low, but we have done pretty well being fully insured,” Brown said. “At this time it just doesn’t make financial sense to make that large investment.”
The types of programs the entities choose also make a cost difference. Employees can get discounts in a number jurisdictions for participating in health and wellness programs.
Last month, when they approved the insurance renewal, the commissioners ended a $720 annual premium credit available to employees who completed programs meant to decrease the costs of claims. About 530 employees participated in the wellness program over the past two years.
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Those employees have received a $60-per-month credit in their insurance premiums. The health insurance committee decided to give participants gift cards instead, so the discounts won’t happen in 2020.
Commissioner Cindy Carpenter said the county discontinued the incentive because the necessary programs were “minimal” and not helpful in reducing the number of claims.
“We need to revamp our engagement strategy,” she told the Journal-News. “It will be disappointing that employees can’t gain discounts on their premium, but that was an initiative we took to drive down the cost of claims and it didn’t drive down the cost of claims. It didn’t pay off.”
To the contrary, Tim Werdmann, executive director of Internal Services for Hamilton, credits the wellness program for the single-digit increases the city has seen. The highest increase was 7.66 percent in 2017 and the lowest is next year, 1.6 percent for the $7.5 million projected plan for 499 plan participants. The average increase has been 3 percent.
“I attribute much of that success to our wellness program. We have had better than 70 percent of our eligible employees participate in our wellness program over the past few years,” Werdmann said. “This helps with catching potential claims before they become unmanageable, which has a positive impact on our rates.”
The city moved to self-insurance in 2014 when the rate increase was expected to be close to 20 percent.
Middletown had a 21.7 percent increase in 2015 but saw a 24 percent decrease in 2017. Acting City Manager Susan Cohen said the employee health care committee made plan adjustments to offset the increases. Part of that meant increasing the employee’s share of the cost from 11 percent to 13 percent, it now stands at 12 percent.
“We had some bad years and the committee worked with the broker to make some changes in plan design and offerings,” Cohen said. “At one point we did get rid of a wellness program, there were some plan design changes that accounted for a good chunk savings. Frankly employees paid more and had some difficult choices to make on plans.”