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FAYETTEVILLE — Facing a crucial decision about benefits for employees, Cumberland County is going to ask its workers for their perspective.
Cumberland County will survey its employees in the coming weeks to see whether they prefer higher premiums with lower deductibles, or vice versa, as part of the upcoming fiscal year’s health insurance plan.
The Board of Commissioners on Monday unanimously approved taking $2 million from the county’s general fund to keep premiums and deductibles the same as last year as a way to keep high and rising health care costs in check for employees.
Before finalizing those rates, though, commissioners want to see what workers prefer.
Commissioner Jimmy Keefe, who objected to not lowering deductibles at a previous meeting, introduced the idea of a survey Monday.
“I’m not asking for any additional money, but possibly paying a higher premium to get a lower deductible,” he said.
Oftentimes, Keefe said, employees are unable to pay the high deductibles, resulting in letters and calls from collection agencies.
“It’s just a revolving door of pain and suffering,” he said.
The current deductible for individuals, under the county’s plan through Blue Cross Blue Shield, is $2,000. For employees and their families, it’s $6,000.
The monthly premium for a standard wellness plan is $21 for individuals and $296 for families.
How premiums impact deductibles
Cumberland Finance Director Vicki Evans said key differences exist between premiums and deductibles that prevent an exact offset in increases and decreases to either.
“The premiums give the county upfront money because that’s being deducted from the employees’ pay every pay period, but the deductible is on the back end,” she said.
Most employees are far from likely to pay the full deductible, as that requires receiving that much health care in a given year.
“Many of our employees, they never meet (the deductible),” Evans said. “They go to primary care visits only during the year. Primary care visits are only subject to copays. There’s no real impact on the people who may be paying more for a premium without additional benefit.”
To determine the effect of a higher premium on the deductible, Evans said, the county’s insurance broker will need to run figures that account for a collective claims history among employees.
According to a presentation to the county during its previous meeting, annual paid claims rose to over $22 million, an increase of 21.5%.
Evans said she expects to have the survey results ready to present to the commissioners by their second meeting next month on April 18.
Rising health care costs
Before the board’s agreement, Cumberland was projected to have a $4.38 million deficit in health care costs for the upcoming year, according to the county.
Beyond the $2 million from the general fund, the board agreed to raise employer contributions as part of next year’s budget to make up the rest of the costs.
Last year, before the increase in paid claims, the board had planned to decrease deductibles by $1,000, but rising costs rendered that financially impossible.
“It’s just not good news,” Chairman Glenn Adams said at a previous meeting upon hearing the news.
“A benefit isn’t a benefit if you can’t afford to pay it.”
To keep the cost of that benefit the same for now, the board decided to invest the $2 million.
But those costs could keep increasing.
“The county is continuing to monitor health insurance cost trends on a monthly basis,” an emailed statement from the county said.
“Trends are showing health insurance costs are rising. However, each year the broker will evaluate and determine feasibility of various deductible amounts.”
County keeps health reimbursement plan
In an attempt to keep health costs low for workers, the board also decided to keep in place the health reimbursement account for employees.
The HRA, which was established last year, allows employees, once they go over the $1,000 deductible mark, to apply for reimbursement of health costs up to $1,000.
The broker, however, didn’t recommend renewal, as it costs the county $7,000 per month in administration costs.
“This isn’t the traditional way to handle deductibles but is a way the board could help members in managing health insurance costs,” county officials said.