City’s health insurance costs to increase

Nov. 25, 2012 @ 07:37 PM

A new contract for city of High Point employees’ health insurance coverage includes a cost increase of 2.13 percent to the city.
The City Council has approved a one-year renewal with current insurance carrier Cigna Corp. for April 1, 2013, through March 31, 2014.
The $12.7 million contract covers health and dental insurance for 1,431 city employees. The city’s health insurance contribution will increase from $6,180 to $6,600 annually for each eligible position, effective July 1, 2013.
The increases will amount to a total health insurance budget increase of $611,649 for the city.
Of the total contract amount, $9.4 million will be paid by the city, $2.5 million will come from employee premiums and $742,104 will be contributed by retirees through their premiums.
There will be no increase in dental insurance premiums for employees and retirees or in the city’s current monthly contribution of $20, or $240 annually, per person for dental coverage.
Along with the increased cost to the city, officials said they are passing a larger portion of insurance costs to employees.
The new contract will increase annual deductibles for employees with no dependents from $650 to $750 and from $1,350 to $1,500 for employees covering one or more dependents. It also increases annual out-of-pocket maximum expenses for employees.
Employee and retiree health insurance premiums will increase $30 per month for the purpose of establishing a wellness incentive, officials said.
Employees and retirees who take certain measures, such as a health-risk appraisal, will have a certain amount of money placed in a “healthy-rewards” account administered by Cigna, which will reimburse employees and retirees for a portion of their out-of-pocket medical costs.
“We need to get into an approach where we’re linking wellness to results. In other words, we’re not just asking employees to do wellness-related activities, we’re saying, ‘If you do them, this is what will happen. If you don’t do them, this is what will happen,’” said city Human Resources Director John McCrary.
The new contract does away with the city’s “grandfathered” status with respect to the federal Patient Protection and Affordable Care Act. McCrary said changing this status will provide greater flexibility to make plan design changes and more opportunities to incentivize employees to get more actively involved in wellness programs.
“Since things have somewhat settled down now with the Affordable Care Act, with the Supreme Court case and with the election, we know where we’re headed,” McCrary said. “This will give us more flexibility in the future.”