Health insurance cost to rise for city, employees

May 23--The city of Terre Haute and its more than 530 employees are in line for a double-digit increase in health insurance costs, effectiveJuly 1.

The Board of Public Works and Safety Monday approved renewed coverage with Anthem through ONI Insurance Partners. A 13.1 percent increase in costs is due largely to an unusually high number of claims exceeding the city's per person deductible of $150,000, Calvin Conerly, account manager with ONI's Employee Benefits Division, told the board.

Conerly said ONI received proposals from other insurers but found Anthem offered the best price.

Between May 2016 and March of this year, Anthem paid more than $1.6 million in claims that exceeded the deductible. The city paid $738,000 in reinsurance to Anthem for those excess claims.

Medical and prescription claims below $150,000 per person were more than $8 million, about $350,000 less than 2015-16. Those claims are projected to increase more than 13.6 percent for 2017-18 to between $7.6 million and $9.5 million.

Less than 5 percent of the city's insured population accounted for more than 67 percent of total claims paid, according to information provided by ONI. More than $3 million in claims were attributed to just 10 members of the city's insurance plan, Conerly said.

"We see that a lot where ... a small percentage of your population makes up a large number of your claims," he said.

The increased costs will be passed on to city employees. Semi-monthly health insurance deductions for employee-only PPO coverage will increase from $122.58 to $138.54 while family coverage under the same plan will jump from $340.63 to $385.15.

Those opting for a $3,000 high deductible plan will see their semi-monthly deductions increase by a smaller amount, going from $61.10 for employee only coverage to $65.00 while deductions for a family plan will increase from $135.07 to $145.92.

For several years prior to 2016, increased costs were not passed on to workers, City Attorney Eddie Felling noted.

"What happened then is ... our health-related fund started to get hit because those costs weren't passed along," he said. "We're doing this totally off what the expected cost to the city of Terre Haute will be. The problem you have is you could be under that but you could be over that as well, and (when) we're over that the city is going to have to eat that cost."

Felling said officials considered seeking an increase in the employee share that exceeded the city's costs "to help pad our medically related fund."

Because of the size of this year's increase, he said the administration opted to limit the request to the actual increase in costs. However, he told the board employees could be in store for increases that exceed actual costs in future years.

The city's group health fund ended 2016 with a deficit of more than $700,000.

About one-third of city employees are in the high deductible plan, said Felling. He predicted that percentage will increase sharply in response to the scheduled increase in PPO premiums.

Dave Taylor can be reached at 812-231-4299 or dave.taylor@tribstar.com. Follow him on Twitter @TribStarDave.

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