Insurance hike adds to Cumberland County’s budget issues

March 10--Cumberland County's potential budget shortfall for next year has increased from $14 million to $15 million.

The additional money is needed for the county's employee insurance plan. Mark Browder of Mark III Employee Benefits told the commissioners' Finance Committee that the county will have to pay about $1 million more in 2017-18 than the current fiscal year.

The county's self-funded plan is underwritten by an insurance company.

The county already was facing potential revenue losses of $11.6 million and additional expenditures of $2.45 million, officials said.

About $4.1 million of the losses are associated with an expected decline in tax revenue because of a drop in property values in this year's revaluation. County officials say the property tax rate of 74 cents per $100 in property value might have to be increased by about 2 cents to offset that loss.

Browder said the $1 million increase for the insurance plan is needed even though the county is paying about 24 percent less in claims and pharmacy bills for 2016-17 than the previous year.

"The $1 million is there to be sure we cover the cost for the upcoming year," he said.

County Manager Amy Cannon said county staff members will take the expected increase into account when preparing the budget.

The county saw spikes in payments for 2014-15 and 2015-16, Browder said.

Commissioners approved a plan last year for 2016-17 that requires employees to pay more for visits to specialists. Deductibles and coinsurance limits also increased.

Browder said the county would have to provide $4 million more than this year if commissioners wanted to go back to the way the plan worked in 2015-16.

County employees will not pay higher premiums or see reduced benefits next year, Browder said.

The $1 million hike represents a 4.69 percent increase, while some other counties are seeing 30 percent increases, he said.

"It's a very good renewal," he said.

Browder said a normal increase in insurance cost is about 8 percent to 10 percent.

"There is a constant upward pressure on health care and the plan that is outside your control," he said.

Staff writer Steve DeVane can be reached at [email protected] or 486-3572.

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