Jackson County restructures employees’ health insurance after costs balloon

Oct. 31--MURPHYSBORO -- After years of deliberation and research, the Jackson County Board has tackled the county's "biggest financial liability," Chair Keith Larkin said Oct. 29.

Beginning Jan. 1, it will move its pool of about 250 employees, spouses and dependent children from a self-funded health insurance plan, to the H.O.P.E. Trust, an insurer for Illinois municipalities and counties.

"A self-insured plan is great if you have a healthy population that doesn't have many claims," Larkin said.

That's how the Jackson County employee pool looked 15 years ago, he said.

With no insurance company taking profits off the top, the plan saved significant money, board member John Rendleman said in June.

But over the past decade, health care costs nationwide have skyrocketed, county employees and their families have required more medical attention, and the county's insurance pool has shrunk, reducing its health care budget and making annual expenses less predictable.

Every year since Larkin joined the board in 2012, the county's health care costs have exceeded budgeted funds, he said.

Even in years when the board budgeted for "aggressive" increases, Larkin said, costs rose further still.

Meanwhile, the county took on a greater share of those new costs than most employers.

"No one in a private sector job saw such low cost increases in their health insurance premiums as our employees did," Larkin said. "Health insurance is not an easy thing to discuss because it's very expensive and it's very personal. It is hard to look at somebody and tell them, 'I need you to pay more for this.'"

Together, those factors put the county's health care spending at least $2 million above what it planned over the past five years, according to County Treasurer Liz Hunter. That has required it to cut spending in other areas: declining to replace employees who leave or retire, and asking the county engineer, highway, ambulance and sheriff's departments to make do with old equipment that ought to be replaced.

Judicious spending helped the county avoid taking any external loans. But it did fall into a "cash flow game," Larkin said, spending this month's tax income to pay last month's health care costs.

"To say next year we will have made up every bit of overspending on health insurance in the last decade is not realistic," Larkin said. "Can we plan to where over five years we are substantially decreasing the percentage we are spending on health insurance? I think so."

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To Larkin, the predictability of joining a larger pool and paying fixed yearly premiums far outweighs any potential savings that could come from a low claim year as a self-funded insurer.

And new contracts with three out of the county's four unionized employee groups have reduced the county's share of health care costs.

"I feel like we hit as good of a balance between providing for employees and being responsible with taxpayer money as is possible," Larkin said. "This decision is long overdue, but it was made carefully, with a lot of research and discussion."

County employees have the choice of two H.O.P.E Trust plans: a higher deductible and a lower deductible plan.

The board began working on a new health insurance solution about three years ago.

Its decision to go with H.O.P.E. was made in collaboration with unionized employees, who helped evaluate plans from the companies bidding to take over the county's insurance service, according to Jeremy Noelle, AFSCME Council 31 union representative.

In their contract, employees agreed to accept increases to out-of-pocket maximums, a slightly higher deductible and changes to co-pays on some treatments, Noelle said.

"They (H.O.P.E.) looked at our contract and what we agreed to and they crafted an insurance plan that saved the county money and still preserved what we bargained for in the contract," Noelle said.

The county can change insurers in the future, but employees' contributions are locked in.

"We had been pushing the county to go out and get bids for years," Noelle added. "Previous boards kicked this can down the road a long time."

Nonunionized county employees will see changes in coverage similar to their unionized colleagues, Hunter told The Southern in June.

The county remains in contract negotiations with the Fraternal Order of Police union that represents Jackson County sheriff's deputies.

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