Council pushes for details on possible insurance change

Published 10:53pm Thursday, October 3, 2013

The Selma City Council is considering a temporary health care switch to save hundreds of thousands of dollars.

The effort to switch is led by Ward 1 Councilman Cecil Williamson, who said providing health care through the Affordable Care Act would save the city a huge amount of money in the near future.

“If there is another, less expensive way of providing health care, we need to at least look into it,” Williamson said after the council’s Sept. 24 meeting. “$1 million is a lot for health care for a city our size. My main concern is being fiscally conservative.”

The council invited Blue Cross and Blue Shield of Alabama representatives to its Wednesday work session to see if a switch to the would reduce the nearly $1 million it pays in health care each year.

The Affordable Care Act set up a marketplace that provides multiple plan options. Plan levels are rated bronze, silver, gold and platinum — providing the highest percentage of coverage. Blue Cross also provides insurance through the marketplace.

The city’s current plan, provided through Blue Cross and Blue Shield of Alabama, costs the city $312 per month, per employee. Employees pay $74 per month.

A select group chooses not to participate in the city’s plan, which is another motivator for the switch, according to Ward 4 Councilwoman Angela Benjamin. Of the city’s 312 employees, Mayor George Evans said 9 or 10 choose not to participate in the city’s group plan.

Benjamin said the switch would save money for the city and employees.

“I have been talking to friends and looking at how things are working and there are people who pay almost zero on the marketplace,” Benjamin said.

A large, looming cost may prevent the city from making the switch permanent.

If the city switches coverage, it would incur a penalty of $2,000 per employee, or approximately $600,000 in total.

The cancellation fee would take effect at the start of fiscal year 2015.

Williamson proposed the city abandon its group plan, offer all employees the platinum plan, pay for the cost of coverage for individuals and switch back before the beginning of fiscal year 2015 to avoid the cancellation fee.

The marketplace takes into account each individual’s circumstances when deciding the cost of insurance. Williamson asked the Blue Cross representatives to use salary and age data to determine how much the city would pay if every employee chose insurance at the premium level.

Representatives said it would take approximately two weeks to gather the estimates.

But Blue Cross district account representative Randy Tucker warned members to be careful when switching.

“What the employees would be able to get on the exchange is in no way apples to apples with the city’s current plan,” Tucker said. “The reasons that we provide benefits as an employer are not going away. We use our benefits to attract and retain quality employees.”

Evans said he would have to gather more information before deciding whether a switch would be beneficial to the city.

“There are just a lot of unknowns and a lot of different interpretations,” Evans said. “We have a real first class plan, but I have no idea at this point whether switching would be any better.”

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