Summerville council approves switch to Blue Extend Silver plan with town-funded HRA

Summerville Town Council on Thursday approved moving the town's employee health coverage to a Blue Cross Blue Shield "Blue Extend Silver" plan and establishing an individual coverage health reimbursement arrangement (HRA) funded by the town to lower employee deductibles.

Administrator Slack, presenting the recommendation, said the change would blunt a near-15% renewal increase the town received for its current Blue Cross plan and keep the town's total health cost roughly in line with the existing budget. "We are going to present to you ... some options for employee health insurance coverage that meet some of your goals and also seek to provide continuing consistent quality health care to our employees, and at a dramatic savings," Slack said.

The council's action follows an analysis by the town's benefits consultant and staff of several quotes, including the town's current Blue Cross Blue Shield South Carolina renewal and an alternate Cigna quote. The recommended Silver option places the town in a larger statewide pool, reduces the plan's projected premium impact compared with renewing the town's current plan, and pairs the lower-premium plan with an HRA the town will seed to reduce employees' out-of-pocket exposure.

Under the adopted package the town intends to fund an individual HRA contribution of $3,400 per affected plan holder to reduce the effective deductible employees face; staff estimated the town's share for that HRA at about $544,000 (an estimate that depends on the final mix of employee-only, employee-plus-spouse and family enrollments). The town would also pay an estimated $48,000 for an outside administrator, Benefit Coordinators, to manage the reimbursements. Administrator Slack said employees would submit an explanation of benefits (EOB) and be reimbursed within about a week.

Slack and staff said employee premium contributions would not change under the proposal. Slack described the overall projected cost to the town — premium plus HRA funding and administration — as roughly $5.1 million, compared with $5.65 million budgeted for employee health insurance this year, leaving an estimated net balance of approximately $563,355 in the health insurance fund.

Council and staff reviewed expected trade-offs. The Silver plan paired with the HRA lowers the maximum out-of-pocket exposure the town's staff would face when full reimbursements are applied, but it raises some point-of-service costs: co-pays for specialist visits increase modestly, emergency-room co-pays rise (Slack noted a $300 increase for ER visits), coinsurance increases by about 10%, and costs for some prescription tiers also rise. Slack warned that Walgreens pharmacies "does not work and play well with this plan," and staff said pharmacy-network issues and calendar-year timing would require education and administrative attention.

Chris Grant, a staff member who worked on the analysis, said the town should expect smaller, more consistent premium increases in the larger pool: "The expectation was ... it would lock us in going with the silver plan. Lock us into just single-digit increases year after year," Grant said.

Councilmember Karenette opposed the measure, saying she believed the change would place greater short-term cost and administrative burdens on lower-paid employees. "I am not for this just because I feel like ... it's gonna cost people more money out of pocket, more hassle to submit. People are gonna end up not submitting," Karenette said. The motion passed after a motion and second; the record shows at least one opposing vote by Councilmember Karenette.

Staff told the council the insurer and the benefits vendors need a decision quickly to meet an October 1 renewal start; Slack said the town must report its decision to the carrier the following day. Staff also described a planned education and enrollment campaign — including group meetings, department sessions and one-on-one counseling — aimed at the town's roughly 400 plan holders before the switch. The council and staff said the town may carry forward any unused fund balance year-to-year to seed future benefits, including a possible in-house clinic, but noted none of those steps are finalized and would require future council decisions.