Is St. Joseph County’s contract with health insurance broker transparent enough?
The county
About 1,070 county employees and 200 retirees are covered by the insurance plan managed by R&R, which was hired by county commissioners in 2013. Among other work, it negotiates contracts with health providers and oversees employees' medical bills.
R&R previously didn't have a contract with the county. It had only a "letter of engagement" that didn't outline the firm's responsibilities or how much it is paid.
While the new contract lists the firm's duties, it doesn't say how much it is paid or describe where the money comes from. That is why Kostielney voted against it.
"I would have liked to see that clearly articulated," he said, adding that his vote had nothing to do with the firm's performance, which he thinks has been excellent.
But the contract didn't address that, Kostielney said, because Fleming and Thomas didn't share his concerns.
Kostielney added that to increase transparency, he would have preferred the firm be paid a flat annual fee by the county, rather than allowing it to continue being paid indirectly with health insurance premiums and commissions. The firm was willing to be paid a flat fee, he said, but the other commissioners disagreed with that approach.
As it stands, R&R's compensation varies annually because the county doesn't directly pay the firm.
Instead, R&R gets a percentage of the annual premium paid by the county to its provider of stop-loss insurance; that coverage takes effect only after the county pays
Kostielney said he isn't sure how much money R&R could make this year, but he estimated it could be from "
Kostielney referred questions about the firm's compensation to
But Frick declined to respond to questions about the firm's compensation, saying in an email that "R&R does not comment on client business."
In the same email, however, Frick says the firm's work has saved the county
R&R previously told The Tribune it was paid more than
For his part, Thomas said he has no concerns with R&R's contract. He thinks paying the firm a flat fee would be the wrong approach.
"With a flat fee, sometimes you get flat services, meaning it could limit the scope of services they would provide," he said. "I like them always exploring new ideas to save money."
After the meeting, Fleming didn't return a call seeking comment.
The approval of the contract comes after county officials found a budget error last year that caused a
Also last year, Hamann and some council members questioned a decision made by the commissioners to stick with R&R, arguing that replacing the firm would result in major savings. Other firms that interviewed for the job were passed up.
Hamann said he is puzzled about the reason commissioners didn't approve a contract that says how much R&R is paid. He thinks elected officials deserve to know.
"It would be very good if we were aware of what they're being compensated -- just for the sake of transparency," he said.
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