County health plan needs cash

2012-08-15T13:00:00Z County health plan needs cashBy MARK GUNDERMAN| mark.gunderman@lee.net Chippewa Herald

Chippewa County’s self-funded employee insurance plan has had a pretty good track record, but it’s hit some tough times. The insurance fund dropped so low that the County Board on Tuesday had to transfer $1.7 million from the county’s general fund to bail it out.

The county’s health insurance plan and what to do about it in the future will be the subject of a special board meeting Tuesday, Aug. 21.

A self-insurance plan is a substitute for a county buying health insurance from a private insurance company and paying its premiums. The county collects revenues from employees through premiums, but the vast majority of the funds in the program come from tax money.

The county pays employee health insurance claims itself, using a hired company for administration. Many organizations find self-insurance is more cost efficient than paying ever-rising health insurance premiums.

County ordinance calls for the county’s insurance fund to have a minimum balance of $300,000 and a maximum balance of 125 percent of the current year’s health insurance fund budget, which for 2012 would be $1,651,329.

Over the years, it worked pretty well. From 1993 to 2011, the county has had to transfer from the general fund to the health insurance fund about $1.08 million when claims were higher than expected. However, because claims were sometimes lower than anticipated, over that same period the county transferred from the health insurance fund to the general fund about $1.6 million.

Then the hard times hit. In 2010, the county ended with a loss of $273,839 and 2011 ended with a loss of $550,137. That reduced the fund balance to $811,211 at the start of 2012.

This year, utilization of the plan has been abnormally high.

The reason is likely Act 10, the state law that virtually eliminated collective bargaining by public employees and entirely removed health insurance as a negotiating point. That allows the county to make whatever changes it wants to the health plan without consulting the employees after the expiration of current contacts.

That creates uncertainty about the future among employees.

“They are trying to get as much done now as they can under a plan they know and is practical,” said County Administrator Frank Pascarella.

The trend projects a negative fund balance by the end of the year.

Transfers from the general fund require a super-majority of the board to approve, so 10 of 15 votes were required for passage of the transfer resolution.

“We do have an obligation to pay these claims, so we really don’t have any alternative but to approve this resolution,” Pascarella said.

The resolution passed 11-3.

The county may or may not continue its self-insurance plan and is likely to make changes to it. That will be the subject of Tuesday’s meeting.

Copyright 2015 Chippewa Herald. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(22) Comments

  1. Enlightenment
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    Enlightenment - August 23, 2012 9:14 am
    Red, more support for the ACA.
  2. redfromwi
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    redfromwi - August 23, 2012 12:43 am
    If this where true, why is it health insurance providers are dropping coverages for more and more needed medical proceedures?
    3 years ago MRI's where covered by my health plan, but not any longer, same with my dental coverage, every year another proceedure gets droped from the what covered portion of my plan.
  3. Enlightenment
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    Enlightenment - August 20, 2012 6:43 pm
    Please explain your interpretation of the ACA coverage for pregnancy and prostate per your comment. Do you mean to tell me that prior to the ACA your health insurance premiums, as a man, did not go towards the cost of pregnancies of women covered by that same insurance company and vice versa with the prostate issue?
  4. Enlightenment
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    Enlightenment - August 20, 2012 6:34 pm
    According to the CBO, the premiums of the "Small Group" the average premiums after subsidies will decrease 8-11 percent by 2016. FYI, those in the "Nongroup" can anticipate 56-59 percent decreases by 2016. And on top of it all, insurance companies now have the 80/20 rule because of the ACA.

  5. Enlightenment
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    Enlightenment - August 20, 2012 6:25 pm
    There are also sources that show costs have in fact skyrocketed before ACA. From 1999 - 2009, family premiums for employer-sponsored health coverage increased by 131 percent, before the ACA was passed. Besides, the ACA has not been fully placed in service so your true cost is not known yet.
  6. Merlin
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    Merlin - August 20, 2012 9:38 am
    There are several sources out there that show costs have in fact skyrocketed since the AHCA was passed. They aren't "biased" sources, unless you consider the CBO biased.

    Also, the AHCA accounting is a ruse - it counts several things twice (see the CBO report). Then factor in that males are now required to be covered for pregnancy and females are required to be covered for their prostate - and yet you still want to support it?

    Explains a lot about your logic doesn't it.
  7. Merlin
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    Merlin - August 20, 2012 9:34 am
    I will give you the shortened version - My health care costs.

    Being that I am a middle class private sector working stiff who's health care is paid for in part by a small employer - you know the same as the MAJORITY of the people working in this country, you can bet that most of us have seen our premiums and costs skyrocket. Perhaps large employers like Menard's have not seen such a high cost increase - but then again, those companies aren't the ones that are really affected now are they?
  8. Enlightenment
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    Enlightenment - August 17, 2012 10:11 pm
    Still waiting for a response to my questions from Merlin and Albertville.
  9. Enlightenment
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    Enlightenment - August 16, 2012 10:30 am
    Albertville, health care expenses did not increase 16%, it has been increasing at approximately 5% annually (per capita), which makes me question your 40% increase.

    From 1999 - 2009, family premiums for employer-sponsored health coverage increased by 131 percent, placing increasing cost burdens on employers and workers. Can you blame this increase on the ACA too?

    Does your 40% insurance increase before or after subsidies? Also, your new insurance plan pays for much more now, better coverage.
  10. straight shooter
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    straight shooter - August 16, 2012 6:11 am
    Again this is an example of someone dropping the ball and they should be held accountable. There is no great advantage of being self funded today with some of the health care reforms that have made a more level playing field between fully insured and self insured. Is it the Risk Managers responsibility or the Agent that the County uses giving bad advice or both? To blame this on Act -10 has nothing at all to do with this. It would be claims, plan design & provider discounts & new mandates.
  11. Sand-Blaster
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    Sand-Blaster - August 16, 2012 5:05 am
    Several years ago, Property Insurers known as 'Town Mutuals' (self funded insurance quasi cooperatives) had claims from stroms/hurricanes far exceeding revenue. This caused the policy holders to pay exorbident premiums just to get their claim paid out. ... Gov. regulators changed the rules to help avoid this in the future by requiring "Town Mutuals" to carry "Re-Insurance" ... Perhaps if these 'self-insured' (Health Ins.) municipalities carried such "Re-Ins." major losses would be avioded.
  12. albertville
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    albertville - August 16, 2012 1:53 am
    Enlightenment, actually the 40% figure is a very lowball estimate. And it is not the cost of health care that has gone up 40% (it actually went up 16%), it is the cost of health *insurance*. Big difference. Health insurers are now forced to cover more things that everyone is forced to pay. Now I have to pay for family planning, autism, mental heath screenings, etc.. That is what Obamacare is designed to do. To drive private insurers out of business. Like the county self-insurance. :-(
  13. albertville
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    albertville - August 16, 2012 1:29 am
    Jim Bob, I doubt very much Frank is upset about my insights on here. ;-)
    And if there you are looking for someone to blame, look at the actuaries who gave the county bad numbers. I am sure the county went with the cheaper numbers based on Obamacare being overturned. The county should of assumed it was going to be upheld and went with the far more expensive employee contributions. Now the only way out is to completely dissolve the self-insurance policy and pay the Obamacare penalty tax.
  14. Jim Bob
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    Jim Bob - August 15, 2012 8:14 pm
    Hey, Albertville! Way to broadcast a private remark. Classy stuff. That was probably the last time the Administrator tells you anything. Just sayin'
  15. Jim Bob
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    Jim Bob - August 15, 2012 8:09 pm
    I don't think you read the article, You are so agitated about your own "side" you see the same in others and falsely accuse. The article states that the effect of Act 10 was to make the County employees nervous about their future coverage (or lack thereof) and to more or less Pig Out on claims now while they have coverage in case they don't later. It has nothing to do with Obama, Re-read, unless you prefer being mad over false conclusions.
  16. Enlightenment
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    Enlightenment - August 15, 2012 7:36 pm
    Merlin, are you that naive? You think health care has increased 40% since the ACA was passed? Can you share with me your sources for this claim?
  17. Merlin
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    Merlin - August 15, 2012 6:05 pm
    How convenient to exclude the most damaging thing to private health care in the past 2 years - the AFHA a.k.a. ObamaCare.

    The County is it's own insurer and they could always make their own rules - because they ARE a self insurer. Act 10 had no effect on this and to insinuate that it did is spreading misinformation.

    Health care costs for the private sector (which includes self-insurers) hasjumped 40% since the AFHA was signed.

    Gee, I wonder what side Mark is on?
  18. straight shooter
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    straight shooter - August 15, 2012 5:43 pm
    I do feel some folks should be head accountable with this. Businesses should be self funded if they choose to be but not municipalities. I don't think the County has gone out for bids either for quite sometime to see if they are getting the best plan options at the best costs. Many businesses and individuals are going to see increases in health care due to the reforms that have been put into place and those that will be coming soon. Most of us will see our plans go up from 19% to 31%.
  19. albertville
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    albertville - August 15, 2012 5:15 pm
    So why didn't Mark Gunderman talk to Connie Goss who runs the program? I bet he did and she told him the facts that didn't fit his anti-ACT 10 rant. And the Administrator told me today he was taken out of context on the article. He was talking about how the employees always get major medical procedures done during the summer. And he did mention that the costs for everything went up dramatically because of Obamacare and their new mandates.
  20. albertville
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    albertville - August 15, 2012 5:09 pm
    ACT 10 has NOTHING to do with this. In fact, it gives the county more flexibility in dealing with costs and what employees pay.. But it does NOTHING to reduce what is covered. That lies with the Obamacare mandates on insurance. The county is forced to cover birth control, mental care and other things that was not covered when the actuaries set the years' employee contribution. The county was hoping Obamacare was going to be overturned and they set the costs based on that.
  21. straight shooter
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    straight shooter - August 15, 2012 2:12 pm
    It appears the County should not have been self funded at all. With insurance laws and rules changing the past couple of years leadership should have had insight to make proper changes. Now as a taxpayer this is really going to be costing us. Who handles the Insuance the Risk Manager? Also didn't the County get their hand slapped a couple of years ago for put HSA funds into an account they weren't legally allowed to.... Come on manf! People need to be held accountable.
  22. Michael
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    Michael - August 15, 2012 1:40 pm
    Looks like it’s time to raise the deductible and kick in premiums similar to the rest of the population.
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