Crossville Chronicle, Crossville, TN

November 12, 2012

City to consider changes to employee benefits

Changes to life, disability and dental insurance could reap $100,000 a year in savings

By Heather Mullinix
Assistant editor

CROSSVILLE — The Crossville City Council will consider changes to the employee benefits package that, if approved, could save the city more than $100,000 a year in costs. Changes would be made in health, life, dental and short- and long-term disability insurance plans.

Crossville City Manager Bruce Wyatt told the council during its work session Tuesday, "We've given a lot of time to this subject in the last year and taken a long, hard look at the employee benefits package. Our objective was to say where we could reasonably find savings without harming employees."

In working with Tonya Hinch, of Don Hinch and Associates, the insurance committee developed a recommendation that would increase health insurance costs only 6 percent in the coming year, instead of the 10 percent increase the current plan would require. The city budgeted for a 7 percent increase.

However, the recommendation also requires employees to split the cost of the increase for dependent coverage with the city. In the past, the city paid that increase in lieu of salary increases. The city pays 100 percent of employee coverage.

The Network S Blue Cross/Blue Shield plan recommended increases the individual calendar year deductible to $2,500, from $2,000. The out-of-pocket maximum also increases from $2,500 to $3,000. The added cost to employees is $14.88 per week for those with family coverage, $7.78 per week for those with employee and spouse coverage, and $6.95 for those with employee and children coverage. Employees with Network P plans would bear the cost of the difference between that plan and the Network S plan, $10.27 per week for employees. It was noted 12 employees have this health plan, but they use doctors in the Network S plan and could easily switch if they chose.

The city could have kept health insurance at the same cost, but that would have required upping the calendar year deductible to $5,000.

Also, with changes required under the Affordable Health Care Act, the coverage will now provide more coverage for preventative care, including yearly mammograms with no out-of-pocket costs, and annual check-ups up to $300 per year without co-pay or deductible, Hinch explained.

"There are a number of things we can put in place to drive our costs down long-term," Bruce Wyatt said. "We need understanding from the employee of the cost of health care. If the employee is isolated from the cost, then they are not motivated to control costs."

Ideas included helping employees quit smoking, becoming more fit and mandatory health screenings. The state of Tennessee charges its plan participants $600 more per year for smokers. Those willing to quit can be covered without the additional charge. Blue Cross/Blue Shield also offers incentives for taking part in a voluntary personal health assessment and health coaches are available to plan participants.

Mayor J.H. Graham III said, "Obesity and smoking has got to be addressed. It's costing all of us."

In looking at short-term and long-term disability coverage, Bruce Wyatt recommended changes that would save $70,000 per year. He said the city had paid $280,000 in premiums for this coverage in the past four years, but only $16,042 in claims had been paid to employees. Bruce Wyatt also noted the city provides employees 15.6 paid vacation days each year, 13 sick days each year and 9 paid holidays.

"The sick time and vacation that accumulates is a good package and enough to take care of most of those circumstances," Wyatt said.

Removing that coverage would save $70,000 a year.

The city also currently provides life insurance that is equal to twice an employee's annual salary. The city council is also covered with a $50,000 benefit. Changing that coverage to a $25,000 across-the-board benefit would save the city $23,500 a year. Employees could purchase additional coverage at their own cost.

"This amount is enough to give a sense of security," Bruce Wyatt said. "It won't create an estate, but it would take care of those final expenses in a terrible event."

A change from Ameritas dental coverage to Delta Dental would save the city about $13,000 a year. That plan keeps 100 percent coverage for exams, X-ray and cleanings, 80 percent coverage for basic restorative procedures and 50 percent for major restorative procedures. The deductible remains $50 per year and has a $1,000 maximum yearly benefit. Those are the same levels provided by the former Ameritas plan. Costs are $23 per month for employee coverage, $46.02 for employee and spouse coverage, $59.94 for employee and children coverage, and $92.57 per month for family coverage.

The Ameritas plan, however, has allowed plan participants to earn additional yearly benefits, up to $1,000, for meeting certain guidelines, such as keeping preventative appointments and having no major procedures in the last few months of the year. That balance for city employees is at $124,000 and would be lost if the city changed plans.

The council will consider the changes in its meeting Tuesday. Open enrollment will begin soon, and a decision on changes is needed so that employees can be properly informed.

Also on the agenda for next week are three sewer line repair projects to correct leaking or collapsed pipe areas. Areas of concern include about 800 feet of line south of Hwy. 70 E., Greenbriar and Lantana Rd., which handles about one-third of the city's effluent. Another area is on Hwy. 70 E. at the Blind Zebra, where the line has collapsed under the canopy of the gas station across the street. This has caused significant difficulty in serving the customers in that area.