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Council workshop recommends UnitedHealthcare to cut renewal costs for employee medical plan
Summary
At the Dec. 2 council workshop, Schreffer Insurance recommended switching the city's employee medical plan to UnitedHealthcare, presenting a negotiated renewal that advisers said yields roughly $122,000 in savings (about a negative 8% net change) versus the Anthem renewal proposal; council voted to forward the recommendation to full council.
Scott Schreffer of Schreffer Insurance presented the city's medical renewal options and recommended moving the city plan to UnitedHealthcare.
Schreffer said Anthem's initial renewal request included an 18% increase and would have added about $194,000 in cost, while the broker-negotiated UnitedHealthcare package would instead produce a net negative 8% change and "a $122,000 savings" compared with the current plan. "Our initial renewal started 18%... so we were able to get them down to 13%," Schreffer said, describing carrier negotiations that produced the recommended quote. He added UnitedHealthcare "proved that out for us" after Anthem's poor prior-year results.
Schreffer explained the recommended plan changes include a coinsurance adjustment: after a $5,000 deductible the plan would pay 80% and employees would pay 20%, which Schreffer calculated would raise the worst-case out-of-pocket to $7,150 for employees who exceed the deductible. He noted only about 15% of the employee population historically exceeds the $5,000 threshold and said the broker's estimate of additional city exposure from the coinsurance change over three years is about $26,000–$27,000. "So this negative 8%, a $122,000 savings at over current," Schreffer said, noting the city would fund the deductible via its health reimbursement account so employees would not see a net increase in take-home costs for covered claims.
Council members asked how the coinsurance arrangement affects individual employees. Schreffer described the Health Reimbursement Account (HRA) that the city runs and committed to two employee education meetings and recorded materials so staff and spouses could understand the new cost-sharing before enrollment. "We'll have 2 educational meetings, and we'll also record those meetings to put on our employee navigator site," he said.
After discussion the council made a motion to forward the insurance recommendation to the full council; the motion passed on a voice vote.
What happens next: the council workshop vote sends the recommendation to a future council meeting where elected members will consider final approval and any ordinance or budget changes needed to adopt the new plan.
