Rate hikes may force a Butler County health insurance switch

A 24 percent health insurance hike and employee frustration with the health insurance carrier may prompt Butler County commissioners to switch providers and avoid the $4.1 million added expense.

The county went shopping for a new health insurance carrier after they were warned high claims could push their premiums over 10 percent. Rate increases in requests for proposals from eight companies ranged from 31.5 percent to 14.3 percent or $5.5 million to $2.5 million respectively.

The county’s consultant Horan is recommending the commissioners go with the lowest offering — total cost is almost $20 million — submitted by Medical Mutual of Ohio (MMO).

“We know at the end of the day it’s not always about cost, it’s about service,” Horan consultant Angela Wolfe told the commissioners Monday. “Which is why we took everything into account here.”

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Human Resources Director Laurie Murphy said the county is in the second year of a three-year deal with Meritain Health — a subsidiary of Aetna — as the third party administrator of the health insurance. She said the big rate hike is not the only thing prompting the commissioners to look around.

“Mostly the employee experience has not been what the commissioners want for the employees,” Murphy said. “There have been a lot of problems with the wellness portal and just employee frustration.”

If the commissioners make a switch, there will be a $50,912 penalty.

Last year the county went to a self-insurance model after several years of double-digit increases for insurance coverage. The prime-movers behind the rate hikes were some large once-in-a-lifetime claims over several years. They had a single $5 million claim in 2013 and a $3 million month in November of 2014.

Under the self-insured plan the county pays an administrative fee and the claims themselves. There is a stop-gap feature so if claims top the $175,000 mark the insurance carrier picks up the costs for anything over that amount. Last year the county had 19 claims top the stop-gap level compared to only two in 2016.

A couple months ago county officials said they were expecting health insurance costs to jump 10 percent next year for the county’s 1,350 insured employees. Murphy said through June they have paid $8.2 million in claims against a $17 million budget and the average weekly pay-out for claims was $316, 358 for the first six months.

Earlier this year the county had to transfer $2.8 million into the insurance reserve to cover higher than expected claims.

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Commissioner Don Dixon said they look at health insurance as part of an employee’s compensation so they have to look at the whole picture, while still being mindful of who is paying these people.

“It is a big number but not near as big as it could have been,” Dixon said, noting they have “turned over every rock” they could to make sure they are getting the most cost effective plan possible. “I think we’ve got a good plan to make sure that our employees get the health insurance they need and our taxpayers are assured that they’re paying for what’s needed.”

In the past when the county has been hit with large rate increases the commissioners have not passed the hikes on to the employees. Commissioner T.C. Rogers said at this point they have not made decisions about employee contribution percentages or the other finer details.

“We’re still thinking the same thing,” Rogers said about the county absorbing the entire increase. “But there are limitations, so I’ll consider an increase because of the amount.”

The commissioners have asked Wolfe to get them some more information about the two top contenders for a potential new contract — Medical Mutual of Ohio and United Healthcare — before they make a choice.

“I didn’t get the sense with the Medical Mutual presentation that they were employee-centered,” Commissioner Cindy Carpenter said. “And I heard over and over again of the different ways that they cut costs by limiting services to the employees, so that is a big concern of mine, I want the employees to have what they have now, if not a better plan.”

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