Wed Mar 10 2010
by Brent Hovey
Reporter
Aurora -- City Council renewed health coverage and insurance for city employees at its meeting Aug. 25, and employees will see virtually no change.
The only significant difference in the package is the coverage will increase claim liability per employee from $40,000 to $50,000.
And that means the fixed cost of the coverage for the city dropped from $409,809 to $367,607, officials said.
Stop-loss insurance pays employees' medical bills after they have paid a certain predetermined amount.
Once they reach the specified amount -- in this case $50,000 -- the insurance pays for the rest of the individual's medical expenses, up to the policy's coverage limits.
"The out-of-pocket expense to the employees stays the same," said Finance Director Bob Paul.
According to the proposal put together by Bill Morris, the city's insurance agent, the reason for the increase in claim liability is the increase in the number of insured employees and dependents.
Because of the change, Paul said the city "is taking a chance that no one will incur more than $50,000 [in health bills], which has never happened before."
He added normally two or three people go over the $40,000 mark, including two this year.
Morris said the city has been at $40,000 since there were just 80 employees, and the current plan covers 125 workers.
The total cost of coverage for insurance, which is provided by Medical Mutual and Uniamerica, should not exceed $2.35 million, Paul said.
He explained city officials budget for that maximum, but anticipate spending only $1.9 million, or $450,000 less than budgeted.
Dental and vision plans were mainly unchanged. Coverage is provided by Business Administrators and Consultants. Morris said those plans have been the same for two years and "there is no reason to change a good plan."
Life insurance and long-term disability will continue with Mutual of Omaha. Paul said there will be a slight increase of 2 cents per $1,000 worth of coverage.
"This is based solely on aging," Morris said. "You're not hiring older folks; just everyone gets older."
E-mail: bhovey@recordpub.com
Phone: 330-688-0088 ext. 3155
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