Jackson County mulls health insurance changes amid budget shortfall

Jun. 26--MURPHYSBORO -- When Jackson County closed its nursing home, the Jackson County Rehab and Care Center, in 2014, it cut county staff by around 40% and improved the county's fiscal health, said longtime board member John Rendleman.

But due in part to that streamlined workforce, the county is now grappling with another financial challenge.

For health insurance, Jackson County is self-insured, collecting dues from employees and paying out when they need care.

When the pool of about 250 employees, their spouses and dependent children, is healthy, the plan saves significant money, since no insurance company is taking profits off the top.

But when clients suddenly need medical attention, it creates budgeting dilemmas.

"With a larger pool we had less liability," said Finance and Administration Committee Chair Liz Hunter. "Now, it is very difficult to budget each year how much we'll need for health insurance claims because it varies so much."

After two years of unexpectedly high claims, the county is now facing a $1.3 million shortfall versus budget projections, which county leaders expect could take years to recover from.

So far it hasn't affected the county's ability to pay its bills, Hunter said.

But the county is looking at several lean months, with property tax revenue not expected to arrive until September.

"Property taxes account for about $7 million annually, of the $17 million that comes into the county's general account," from which salaries, health insurance and many county purchases are paid, Hunter said. "Right now we're relying on other revenues like sales tax and personal property replacement taxes to keep that account funded."

If those state government payments come up short in the next few months, the county could face a tough choice, board members said: take loans from other county funds, or take out a bank loan to be repaid with future property taxes, a measure known as a tax anticipation warrant.

So far, neither has been necessary, Hunter said, but the county board has authorized borrowing internally from the Housing of Prisoners and Ambulance funds, should it become necessary.

"This year has been tight, but we are moving forward," Hunter said. "It has gotten to the point where we know we have to make changes."

The reforms began with recent bargaining agreements between the county and its unionized employees.

Three out of the county's five employee groups -- courthouse workers, ambulance workers, and employees in the circuit clerk's office, represented by the Unionized American Federation of State, Civil and Municipal Employees (AFSCME) -- have accepted a restructuring of the health insurance plan, which includes slight increases to out-of-pocket maximums, a slightly higher deductible and changes to co-pays, said Jeremy Noelle, AFSCME Council 31 union representative.

"Of course nobody likes to pay higher health premiums, but we all know, unfortunately, at this point in time in America it's the way of the world," Noelle said. "We wanted to pay our fair share."

The bargaining was arduous, Noelle said, and nearly reached a breaking point in late September, when the union voted to authorize a strike if the board did not agree to continued negotiations.

Jackson County Board votes to return to negotiating table with AFSCME 31

Local News

Jackson County Board votes to return to negotiating table with AFSCME 31

* ISAAC SMITH

The Southern

But, with the help of a federal mediator, the sides found common ground.

"We did a lot of back and forth negotiations and felt the unions strongly understood this was the key financial issue for the county," Hunter said. "They compromised and we compromised, and it's still a very strong plan with very good benefits to the employees."

Nonunionized county employees will see similar changes in coverage to AFSCME workers, Hunter said.

In addition to the policy changes, the four-year AFSCME bargaining agreement included the creation of a health care task force composed of union members and county board members, who will together explore cost-saving measures for the county.

That includes evaluating plans and bids from health care companies that might wish to take over the county's insurance service, Noelle said.

"We're optimistic and glad they see we're part of the process," Noelle said of the board. "We all want to work together to try to get things solved, instead of kicking the can down the road."

Fundamentally, the work will question the long-term viability of maintaining self-funded health insurance, Hunter and Rendleman agreed.

For Hunter, the certainty and security of using outside insurance outweigh the potential cost savings of a self-funded program.

"As the finance committee chair I would like to budget a single dollar amount each year and know that's what we're going to spend on health care," Hunter said. "That would be my preference."

Using an outside health insurer like Blue Cross Blue Shield would also remove the ongoing burden on the county to adjust its coverage to the rapidly changing health care market, Rendleman said, something the county hasn't always done successfully.

Ultimately, the task force's recommendations will be advisory, Hunter said, and any changes to the county's insurance will require majority approval from the board.

Sheriff's office employees represented by the Fraternal Order of Police remain in contract negotiations with the county, Hunter said, with a bargaining session held on Tuesday.

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