Aug. 01--NEW ALBANY -- Though an increase won't be avoided, New Albany's insurance agent Edward Culpepper Cooper said Tuesday the amount of the hike for the city to cover its employees won't be as much as had been anticipated.
Cooper -- who appeared before the New Albany Board of Public Works and Safety to garner approval for a renewal of workers' compensation benefits -- said the city is looking at a 3 percent increase for employee medical coverage. The increase is quite an improvement over the 11 percent hike that was initially requested for the city's insurance next year, Cooper said.
Humana covered the city last year, as the company's plans run on a yearly cycle from Sept. 1 through the following August. Cooper didn't specify if Humana would again be the insurance provider for New Albany, as he said "we're still studying" coverage plans before presenting a proposal to the board of works.
But the city won't be faced with as high of a premium hike as it seemed it would be when the renewal process started, Cooper continued.
"We're very happy with that," he said.
While the board of works will have to approve the employee benefits package for the upcoming cycle, the city has typically covered 90 percent of health insurance premiums for its workers.
Humana was paid about $4.5 million for medical insurance coverage last year by New Albany, making it the city's second highest compensated private vendor for 2011.
As for the $250,000 savings the city has received through the Affordable Care Act, Cooper said New Albany could use the rebate to subsidize premiums or to compensate employees that paid for coverage.
"You have to do something within three months," Cooper said.
Due to what's known as the 80/20 rule of the Affordable Care Act, which was upheld by the U.S. Supreme Court earlier this year, insurance providers can only charge up to 20 percent for administrative services.
Any portion of premiums collected beyond the 20 percent threshold for administrative expenses last year must be refunded. New Albany Mayor Jeff Gahan said last week he's slated to meet with insurance officials today to discuss how the rebates will be distributed.
Suellen Wilkinson, president of the board of works, said the rebate "just goes to prove that we all know insurance premiums are too high."
The board of works approved the renewal package for workers' compensation through the company Bliss McKnight, as the plan increased $178 for the year.
Cooper said that hike was also substantially less than what had initially been requested, which was more than $6,000 in increases. The workers' compensation plan runs from August to August, and will cost about $263,000.
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