The Village of Flossmoor’s health, dental, vision, and life insurance providers, Blue Cross Blue Shield (BCBS), MetLife, Vision Service Plan, and Dearborn National, are set to expire on June 30. The initial health renewal was larger than budgeted, but additional negotiating resulted in an overall increase of 7.9 percent. Village renewals increased 29 percent vs. PwC Health Research Institute medical trend rates, with an estimated impact of $19,900 to the village budget.
The Affordable Care Act (ACA) provisions remain in effect. Still, many modifications have passed, including repealing the Cadillac Tax, designed to impose a 40 percent excise tax on employer-sponsored health insurance premiums above a specified dollar level, intended to incentivize employers to keep premiums below the threshold.
The Village has implemented the PPO-BCO plan, which introduces a pay-for-performance concept regarding providers and made significant plan design changes in 2015, including raising HMO co-payments, PPO deductibles, Health Savings Account (HSA) embedded deductibles, out-of-pocket maximums, and prescription co-payments.
The Village is offering an HSA plan with an employer contribution to incentivize employees to switch from the PPO plan. The Cadillac Tax was repealed, and the level of satisfaction with BCBS remains high. Intergovernmental Personnel Benefit Cooperative (IPBC) has yet to provide rate quotes. According to the memo, the Village is doing well in partnership with The Horton Group, which includes healthcare reform education, wellness program assistance, seminars, dental plan design and offerings, vision plan design and offerings, and HSA Employer Contribution.
According to a recent report, MetLife is the most competitive provider. The Horton Group recommended retaining a three-tiered contribution incentive and offering it as a yearly calendar year contribution.
The village implemented a “carve out” plan for retirees 65 or older to reduce premiums and risk factors. The wellness program has successfully mitigated health insurance costs with tangible and intangible benefits. The village could reduce benefit levels, mandate spousal carve-outs, provide health insurance for full-time employees, and track affordability requirements for the lowest-cost plan. These options could impact costs in future renewals.