Proposed health insurance could save county $500K

County Commission
Commissioners Tripp, Christensen, and Evans discuss an issue at an August meeting of the Charlevoix County Commission (Photo: C. Faulknor/BC Gazette)
A new insurance policy has been introduced to the Charlevoix County Commission for employees that could potentially save the county $500,000

By: Benjamin J. Gohs, Associate Editor
bgohs@boynegazette.com
(231) 222-2119

Commissioners Tripp, Christensen, and Evans discuss an issue at an August meeting of the Charlevoix County Commission (Photo: C. Faulknor/BC Gazette)

The Charlevoix County Commission was presented information on a potential new health insurance plan for employees during the board’s regular Nov. 9,meeting.

 

Following passage of a new law latethis summer which requires public entities to require their employeespay at least 20 percent of their health care costs, the board begandiscussing how it should proceed.

“The one plan that looks veryattractive from both financial and benefits standpoint is the HSAplan,” said Denise Lewaniak with Korthase Flinn, who presented the commission with her findings. “It covers the exact same things thatis currently covered to date except two areas where the benefits are reduced at a much more attractive financial cost and in a differentway with how it’s paid for.”

She added, “It is not a new program but it is different from what they have today.

Lewaniak said the county road commission and several cities are also using this type of plan fortheir employees.

According to Charlevoix County Clerk Cherie Browe, even if the county funds the employees’ health savingsaccount for the first year, it will still save the taxpayers nearly$500,000 from the current health insurance plan.

Highlights of the plan include:

  • High deductible
  • After deductible limit
  • A family’s maximum out-of-pocketdeductible for a year would be $4,500. After that all prescriptionsand medical are covered at 100 percent.
  • Prescriptions apply to the deductible also.
  • Once you meet the deductible it costs$5 for generic and $25 or $50 for brand name.
  • There is no per-existing conditionpreclusion through Blue Cross.
  • The Charlevoix County Road Commissionhas used this type of plan for four years.
  • The plan could save a half-milliondollars.
  • If an employee retires or terminatesemployment, they may take the funds with them.
  • The money can be used for non-medicalcosts, but with steep financial penalties and applicable taxes.
  • The potential changes will not affect county retirees.

Joel Evans, County Commissioner

Charlevoix County Commissioner andBoard Chairman Joel Evans (R-District 4) said, “We are responsiblefor how we spend money and if there is any way we can save money …for Charlevoix County we want to do that; however, we also serveCharlevoix County … and the very important workers that are here –we want to do what’s best for them also.”

He added, “My question would be,first of all, what advantage to our employees is this programcompared to what it has been?”

Lewaniak said one advantage to theemployees using the new plan would be the health savings accountwhich can have a maximum of either $3,100 for a single person or$6,250 for a family contributed to that account annually. These arethe numbers for 2012.

“Those are pre-tax deductions to theemployee – that means that’s tax-free from state and federal taxes.It can also have employer contributions into that account,” shesaid. “And then that money is theirs. It can be used tax-free. Soit goes in tax-free. It grows tax free. And, comes out tax-free foreligible medical, dental and vision expenses.

Charlevoix County Commissioner RonReinhardt (R-District 3) said when he worked for the private sectorpeople lost whatever health savings they didn’t use on medicalexpenses in a year.

But, Lewaniak said, this new plan doesnot work that way.

“With an HSAbank account that moneyis the employees’. The county doesn’t know how much there is there.Once that money is deposited into that account by their employer itis theirs and continues to stay theres,” she said. “From anemployee’s perspective, the HSAbank account is a definite advantageto them even if they are high utilizers of medical and prescriptioncosts.”

Lewaniak said there is slightly morecost to the employees with this plan.

“They are now going to be paying forexpenses that they have not had to pay before because they werecovered at a hundred percent,” she said. “So, with some fundingof that HSAbank account it helps cover some of those expenses.”

Those who qualify for medicare and areenrolled in Medicare Part B are not eligible for the health spendingaccount.

“For those employees that are ages 55to 65, they can also contribute an additional thousand dollars a yearto that HSAbank account,” Lewaniak said.

Once an employee reaches Medicare age,they can spend whatever they have saved in the health savings accounttoward their medical costs with no tax penalty.

“Each Medicare situation is unique,”Lewaniak said.

Lewaniak recommended the county fundthe health savings account for at least the first year.

“Funding for the first year or two ofthe HSAbank account is really critical,” she said. “So thesituation doesn’t happen where – I have some clients where they areon $2,000 medication. They go to the pharmacy and they are going tobe charged at $2,000 – so, funding this for the first year willallow everyone to not have that huge financial burden on day one.”

Lewaniak suggested the county fund$2,250 for a single person and $4,500 for families on the proposedinsurance plan for at least the first year to give employees afoundation from which to start.

Those employees hired after 2004 pay aportion of their health care costs already.

“I feel very sad for our singlemother or single father that is trying to raise their children andwork because they’re going to be hit hard,” said Charlevoix CountyRegister of Deeds Charlene Novotny.

An informational meeting for personnelto learn more about their potential new insurance will be scheduledat a later date.

The decision on the insurance must bemade by Dec. 31.

 

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