OMU proposes changes to health insurance plans

Sept. 05--With the goals of lowering overall health care costs, providing employees with more control of health spending decisions and improving overall health and employees and family members, Owensboro Municipal Utilities is proposing to offer a type of health insurance coverage that includes an H.S.A., or health savings account, and lower premiums but higher deductibles.

OMU, which self-funds its health care insurance with third-party administration, will continue to offer its standard health insurance coverage plans -- consisting of a free "basic plan" and a "premium plan." But premium costs to employees in the premium plan will be going up about 9 percent to cover cost increases, while deductibles -- the amount the employee pays before insurance kicks in -- and out-of-pocket limits are also increasing moderately.

Under the premium plan, the per-pay period cost to an individual employee is now $23.41. With the increase, that figure will go to $25.79, or $618.96 a year. The premium for the family plan will rise from $95.27 per paycheck (24 per year) to $104.97, or $2,519.28 a year. New deductibles will be $500 for just the employee, $1,000 for the employee and one other person, and $1,500 for families.

"OMU's health care cost per individual had been slowly increasing just like most employer plans across the United States," stated Dana Wilson, OMU's human resources and safety manager, in a memo to OMU General Manager Terry Naulty. "Our 2015 costs were lower than prior years due to our decision to change third party administrators and use a different health care network. 2016 is the second year of our Employee Wellness Program, which not only promotes healthier lifestyles for employees and spouses, but encourages baseline testing to identify chronic disease and begin treatment and/or lifestyle changes to limit the size and frequency of large claims."

But health care costs at OMU for covered members with chronic conditions continue to increase, Wilson said.

According to Wilson, OMU's objective should be to move to health care benefits packages that reward employees and their families for taking more control of their health care costs and achieving the healthiest lifestyles possible. Offering a plan with a health savings account component and incentive reward payments for lifestyle changes helps achieve that objective, she said.

The proposed "consumer HSA plan" for employees reduces the annual premium cost for an individual to $455.52 a year, with OMU contributing $500 a year into the employee's health savings account. But the individual deductible is $2,600 a year ($5,200 for a family).

"Deductibles are a lot higher, but once you meet it, your costs are paid 100 percent," said Michael Moore, director of customer and shared services.

Moore said the health savings account plan offers the opportunity for an employee to tailor a plan to their health needs. "H.S.A.s are not uncommon," he said. "We've taken the time to look at them. The goal is not to push costs to employees but to provide incentives to create healthier lifestyles, to lower all costs."

OMU spokeswoman Sonya Dixon said saving money on health care costs helps the utility keep rates in check.

OMU employees can earn cash rewards by enrolling in company wellness programs, such as weight loss and smoking cessation programs. Many other activities are eligible for incentive rewards, such as signing up with a nutritional coach, running a 5K race or joining a gym. An employee could have all or most of their entire insurance premium subsidized by wellness incentives, Moore said. H.S.A. accounts also offer tax savings.

"While costs are going up, if you do certain wellness activities, costs can be controlled," Moore said. "It's a partnership with employees to save money. It encourages employees to stretch their health care dollars."

Money in an employee health savings account can roll over to the following year and accumulate until needed, Moore said.

"We're going to a more consumer-driven plan for employees, to be better stewards and have more control," Moore said.

The OMU governing board heard a presentation on proposed changes to employee health insurance on Thursday. The board is scheduled to vote on the proposal on Sept. 15.

Steve Vied, 270-691-7297, [email protected]

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