Counties, schools spend millions on health coverage
Taxpayers in the region will continue to cover most health insurance costs for government and school workers.
Local governments and school systems don’t have much choice to pay for most of their employees’ premiums under federal regulations and a state insurance program.
Shenandoah County government and schools, Warren County schools and the Rappahannock-Shenandoah-Warren Regional Jail provide health insurance through The Local Choice.
More than 60,000 employees, retirees and family members in 335 jurisdictions across the state participate in The Local Choice. The state’s purchasing power cuts administrative costs and shared claimed experience offers financial protection for local governments, according to information provided by the Department of Human Resource Management. In response to the rising cost of insurance, department Communications Manager Anne Waring stated by email Saturday that “in general, total health plan costs (employer plus employee cost) continue to increase for services and certain utilization. We are currently going through the annual renewal process, so more specific information is unavailable at this time.”
Shenandoah County government will see no increase in the cost to provide insurance coverage for its employees, Finance Director Mandy Belyea said. The county has included approximately $2.1 million in the proposed fiscal 2017 budget to cover insurance costs, Belyea said.
The Local Choice requires Shenandoah County to contribute at least 80 percent of the average, single employee premium rate and 20 percent of the average additional dependent cost depending on group participating. In other words, a county government worker can contribute a maximum of 20 percent of the single employee premium, Belyea explained.
The Affordable Care Act also requires that the county government’s coverage remains affordable, meaning the employee can contribute 9.56 percent or less of his or her household income toward the premium for self-only coverage.
Shenandoah County offers two plans based on high or low deductibles. The county contributes 100 percent to the single-employee premium. Employees who pick the lower deductible plan contribute $44 per month of the single-employee share while the county pays the remainder. The county also must offer preventative and comprehensive dental coverage with each plan.
Approximately 270 Shenandoah County employees have elected to participate in some form of the insurance program, with more choosing the lower deductible.
Premium rates for high-deductible plans with comprehensive dental coverage range from $525 for a single employee per month to $1,418 for a family and from $512 to $1,382 with preventative dental. Premium rates for low-deductible plans with comprehensive dental range from $569 for single employee per month to $1,536 for a family and $556 to $1,501 with preventive coverage.
Exactly how much Shenandoah County government budgets for health insurance contributions was not available Monday.
Shenandoah County schools can expect to see its costs increase 9 percent next year, Finance Director Cynthia Page said Friday. The school division offers two plans for its employees – one with a $250 deductible and the other with a $1,000 deductible. The division covers the entire premiums for employees on the plan with the higher deductible. The division doesn’t pay for coverage of dependents, Page said. Employees on the lower-deductible plan, with the higher premiums, must cover the difference that is not paid by the division. The school system does not cover the cost for spouses or children on the employee’s plan, Page said.
School system officials expect to spend $437,000 more to cover health insurance costs next year. That amount equates to roughly 1 cent on the county’s real estate tax rate.
“It’s experience-based,” Page said as to why the cost will increase.
Shenandoah County is one of the few school divisions not covering the cost of health insurance for employees’ dependents, Page said.
“Other people are picking up that cost and we are not,” Page said.
Shenandoah County school officials sought bids from insurance providers last year. Premiums increased in the process but not as much as officials anticipated, Page said.
Warren County supervisors plan to consider adopting new insurance rates at its meeting tonight. The county recently issued a request for proposals for health, dental and voluntary insurance services. The county also sought prices for self-insured and fully insured. At the same time, the county asked for how much full insurance would cost through Local Choice. The census during the bid process showed 237 government employees enrolled in the county’s insurance but approximately 257 workers will be eligible to join effective July 1.
Warren County staff consulted with the brokerage firm BB&T-JV Arthur and recommended that supervisors select The Local Choice as the health and dental insurance provider. The Local Choice bundles health and dental plans. The Local Choice quote is equal to a 5.68-percent decrease over what the county pays for Anthem coverage, according to information from Human Resources Manager Jodi Spittler. However, the amount in the current budget doesn’t cover the total health and dental insurance costs so going with The Local Choice means an increase of approximately 10 percent above the allocated amount. The proposed fiscal 2017 budget includes a 15-percent increase in health insurance spending, thus covering the costs to switch to The Local Choice.
The proposed budget includes $2.37 million for health insurance – the amount of revenue generated by approximately 6 cents on the real estate tax rate.
Through The Local Choice the county would continue to cover 100 percent, or $628, of the premium for single employees on the high deductible ($500) plan with preventative dental care. Monthly employee contributions under the high-deductible plans would be $174 of $1,162 with a child, $461 of $1,162 with spouse and $574 of $1,696 with a family. Employees on the low-deductible plan ($250) with preventative dental care would contribute $66 with the county paying $619 toward the premium for themselves. Monthly contributions under the low-deductible plans would be $241 of $1,267 for employee and child; $565 of $1,267 for employee and spouse; $688 of $1,850 for employee and family.
Warren County employees on the high-deductible plan with comprehensive dental coverage would pay $12 of the $639 total premium for themselves; $200 of the $1,182 with a child; $485 of $1,182 with a spouse; $612 of the $1,725 with a family. Employees on the low-deductible plan with comprehensive dental coverage would pay $78 of the $696 premium; $267 of the $1,288 with a child; $589 of the $1,288; $725 of the $1,879.
Warren County schools Superintendent Greg Drescher has advised the Board of Supervisors and the School Board that the division’s insurance costs are likely to increase by almost 20 percent. At a recent supervisors’ work session on the fiscal 2017 budget, Drescher told members that the school system had some high-dollar medical claims that likely drove up the costs. Warren County schools did not seek bids this year for insurance quotes, Finance Director Rob Ballentine said Friday. The School Board’s final budget awaits approval by county supervisors but the division’s proposed spending plan includes approximately $4 million for insurance – roughly the amount of revenue generated by 10 cents on the county’s real estate tax rate. Warren County schools pays 100 percent of the cost for an individual employee but only for the high-deductible plan. The division does cover some of the cost for spouses or children.
Drescher recently presented information on the estimated impact of increased insurance costs. Single employees would see monthly insurance costs for the low-deductible plan ($250) increase from $145 to about $174; with spouse or child from $556 to $666; with family from $968 to $1,159. Employees on the $1,000 deductible plan would see their contribution increase from $71 to $85; with spouse or child from $428 to $512; with family from $786 to $941. Employees on the high-deductible plan ($2,800) would see costs increase from $13 to almost $16; with child or spouse from $278 to $333; with family from $569 to $681.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org