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Ellsworth council weighs high-deductible HSA plan as city insurance rates rise
Summary
City administrator Al told the council insurance rates are rising about 10%, adding roughly $36,000 a year in city costs; he proposed options including switching to an HSA-qualified, high-deductible plan with a city-held reimbursement fund and a third-party administrator. Council asked staff to gather employee feedback before deciding.
City administrator Al told the Ellsworth City Council that the city's group health-insurance rates are expected to rise about 10% under the current plan, which he said would increase city costs by roughly $3,000 a month — about $36,000 a year. He presented several options to limit future increases, including changing employer/employee contribution percentages, modestly raising deductibles, or shifting to an HSA-qualified, high-deductible plan administered by a third party.
"Our council insurance rates are going up 10%. That'll mean an additional expense of about $3,000 a month or $36,000 a year," Al said, and recommended the council consider phased steps rather than sudden changes. He described one model used in nearby municipalities: adopt an HSA-qualified plan (noting a typical high-deductible family level around $6,350), keep core coverage, and place the monthly savings the city would realize into a city account to reimburse employees up to their HSA limits.
Councilors pressed on how the change would work in practice. Darcy asked whether the city would reimburse employees for office visits or deductibles under the proposed arrangement. "So is the city gonna reimburse everybody up to their deductible?" Darcy asked. Al responded, "No. The city paid" co-pays and the plan would use locally held funds to cover costs up to the funded HSA amount rather than a monthly individual reimbursement program.
Multiple council members said they were sensitive to placing more cost on lower-paid employees. Councilor Moon urged getting staff feedback before making any change, saying employees bear the biggest impact. Al agreed to gather more detailed information and said he could bring the item back at the next regular meeting or call a special meeting to decide.
The council did not take formal action on benefits at the meeting. Members agreed the next steps are to solicit staff input, clarify which plan options preserve provider coverage and co-pay structures, and return to the council with concrete cost projections and implementation details.
