City workers face higher insurance costs [Sun Journal, New Bern, N.C.]

May 27--It's going to cost city employees more in the future to get sick.

New Bern aldermen listened to a report on the rising cost of providing health insurance to city employees Wednesday night during a budget workshop. On Thursday, city workers were notified their health insurance options will change and they will be paying more out of their pockets for health care.

The city has to budget $7 million next fiscal year for city employee health insurance coverage, an increase of more than $1 million over current budget. Health insurance has the largest impact on the city budget besides salaries.

The city's consultant, Integra Benefit Management Services, anticipates an increase in insurance costs in 2013 due to rising health care costs and of recent city health insurance claims, according to a memorandum from the city manager to aldermen.

Mike Epperson, city manager, said during the current fiscal year he estimated they would spend $6.4 million in health care costs. The city budgeted for $5.9 million, a gap of about $500,000, he said.

There are reserve funds and savings in all of the departmental funds that will allow the city to cover the cost, Epperson said.

Epperson said the city is locked into a contract for the year and had to make changes. The city will look at other options during the coming fiscal year. Even with the $7 million budgeted for next fiscal year, a shortfall of funds is expected, he said.

Sonya Hayes, the city's human resources director, said the city will go to a 70/30 insurance program starting July 1. Employees will have a 30 percent co-pay, up from a current co-pay of 20 percent; and increasing the out-of-pocket maximum from $2,500 to $5,000 for individuals, and $4,000 to $7,000 for families, she said. Those figures include the $600 deductible.

Prescription co-pays will also change. As a way to steer employees toward using more generic drugs, the co-pay for those will remain at $10 for a 30-day supply.

But co-payments for brand name drugs will increase from $35 to $50; non-preferable brand name drug co-pays will increase from $60 to $80; and specialty drug co-pays will increase from 10 percent up to $100 to 10 percent up to $200 for a 30-day supply.

Mail order drug co-pays will also increase, except generic drugs which will remain at $20 for a 90-day supply.

Co-pays for name brand mail order drugs will increase from $70 to $100; Non-preferred brand name drugs, $120 to $160; and employees will no longer pay 10 percent up to $200 for 90 days of specialty drugs. The new rate will increase to 10 percent up to $400.

The city will also no longer allow spouses to be covered by its insurance plan if they are eligible for health coverage with their own employers.

Alderman Denny Bucher said anyone involved with a public company would say it was a good plan.

Everyone was facing the same high insurance rates, he said.

Eddie Fitzgerald can be reached at 252-635-5675 or at [email protected]. Follow him on Twitter @staffwriter3.

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