04/17/14 — Goldsboro considering options on health care coverage for city employees

View Archive

Goldsboro considering options on health care coverage for city employees

By Matt Caulder
Published in News on April 17, 2014 1:46 PM

The city of Goldsboro is weighing its options on whether to continue to fund its own health insurance next year or pay a company to provide the city with insurance.

Currently, Cigna provides administration services for the city's self-insured plan, which is expected to cost the city $4.7 million this year.

The city budgeted about $4 million for the 2013-14 fiscal year.

The last two years the plan has gone over-budget, leading to the discussion to move to a fully-insured plan, most likely with Cigna, Goldsboro Finance Director Kaye Scott said.

"It would be a seamless transition for our employees," Mrs. Scott said. "The administration of the plan would be the same to them. They wouldn't notice a difference there."

The city put out a request for bids from Cigna at the current $1,300 deductible cap for a single employee as well as a $2,000 and $2,600 deductible cap.

Preliminary rates show that if the city were to use a $2,600 deductible plan through Cigna it would cost $4.5 million for insurance in the 2014-15 fiscal year.

If the city were to keep the same framework of its current plan, with a $1,300 deductible, it would cost the city $5 million.

"We are looking at all of our options," Mrs. Scott said. "That is why we are asking for all of these bids."

The city benefits committee will meet Monday to discuss the different options and make recommendations to the City Council.

While a higher deductible plan would change things for city employees and their families, it would stabilize the city's health costs, freeing up more money for other projects, Mrs. Scott said.

"This year we are expecting to go $600-700,000 over budget," she said. "That is money we can use somewhere else in the city."

Mrs. Scott said that even with a $2,600 deductible the plan is still a good one.

"The city will still offer a really good insurance plan to its employees," she said. "Yes, it will be a little more expensive if you hit the deductible, but it's a good plan."

Another change to the city's insurance this year despite what the benefits committee recommends is that each city employee will now pay $50 a month for insurance, but the cost will be offset with a $50 raise.

Currently, the city provides insurance for each employee at no cost but this new system is meant to get employees used to paying for insurance.

"This way they will see what they are getting. If someone is on our insurance, but covered by a spouse, they can cancel with us and just get the $50 raise per month," Mrs. Scott said. "That's $600 a year."

The city also is expected to add two behavioral cost programs in the next year.

The first will be requiring a free monthly health risk assessment be given to each covered member or a $25 fee will be charged.

"The assessment will give us a baseline to see what programs are working or if we need new programs if say hypertension shows to be a leading health risk," Mrs. Scott said. "Rocky Mount does this to a lot of success."

The second behavioral cost will be if employees identified as diabetic are not participating in the city's free diabetes management program, which offers free supplies and counseling to employees with diabetes.

Currently 38 of the 70 city employees with diabetes participate in the program to an estimated savings of $675,000 in diabetes claims.

Employees who do not participate next year will be fined $25 a month if the Council approves.