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City, GUC employees will pay more for health insurance

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By Ginger Livingston
The Daily Reflector

Tuesday, September 25, 2018

Employees with the city of Greenville and Greenville Utilities will pay more out of pocket for health and dental insurance along with losing prescription drug coverage for certain medicines in 2019.

The Greenville City Council and GUC Board of Commissioners approved the changes during a joint meeting on Monday in the Greenville City Council chambers.

The two boards agreed to switch to a value prescription drug list program offered by Cigna, the current health insurance manager.

“The prescription drug market continues to evolve,” said Steve Graybill, a partner with Mercer, the benefits management consultant working with the two boards.

The value list excludes prescription drugs that are available as over-the-counter medicines to treat heartburn and ulcers. The list also has a smaller list of preferred prescriptions for treating certain conditions.

The preferred list originally recommended would have saved the city’s health plan $210,000 and would have affected 210 employees.

Graybill said members of the joint pay/benefit committee were concerned because commonly used drugs to treat asthma and attention deficit hyperactivity disorder would not be covered and users would have to change prescriptions.

“We were very concerned about asking asthma and ADHD kids to change their drugs,” Graybill said.

Cigna adjusted the plan to grandfather in current users of asthma and ADHD so they could continue with their prescription medicine. New users will have to follow the recommended drug list. The estimated savings will be $188,000 and affect 133 employees.

The city and GUC have a long-term goal of reaching a 80-20 split for funding employee health insurance. The short-term goal was to reach an 81 percent employer share in 2019.

This year the employer share was slightly more than 82 percent, Graybill said.

To reach the 81 percent share employee contributions would need to increase 14.9 percent, he said. No one wanted that large of an increase for employees. The recommendation was a 7.5 percent increase in the employees’ share for medical insurance.

The city and GUC offer employees three levels of health insurance, HSA, core and enhanced.

HSA, or the health savings account plan, is a high-deductible plan that offers employees lower plan premiums with an opportunity to set aside funds tax free for out-of-pocket costs, but with potentially higher costs depending on usage, said Chris Padgett, GUC chief administrative officer.

The core and enhanced plans are traditional preferred-provider-organization plans. These are typical insurance plans, with the core plan having slightly lower premiums and slightly higher deductibles than the enhanced plan.

For employees earning between $46,952 and $61,623, the 7.5 percent increase would raise their bi-weekly contribution to $8.72 from $8.11, a 61-cent increase for an individual employee under the HSA plan; $25.46 from $23.68, a $1.78 increase under the core plan and $42.87 from $39.88, a $2.99 increase under the enhanced plan.

Graybill said the goal is to keep increases in employee costs below 10 percent. He estimates the city and GUC will reach the 80/20 share by 2021, but cautioned volatility in the health insurance market could change the schedule.

The city and GUC also will continue funding a $250 incentive for individual coverage and $500 incentive for family coverage for employees who enroll in the health savings account for the first time.

A 7.7 percent increase in dental insurance costs is needed to prevent the plan from operating at a deficit, Graybill said.

The city and GUC operate their health insurance plans under a three-year strategy.

The goals for 2020 and beyond include the eventual elimination of the enhanced insurance plan to avoid paying an excise tax that is charged on plans that exceed $10,200 for an individual under the Affordable Care Act, also called Obamacare. The tax was supposed to go in effect in 2020 but it has been pushed back and may be pushed back one more time.

Other goal include evaluating the need for the employer contribution to the health savings account plan and in 2022 review the carrier lineup to ensure all carriers align with the city and GUC’s goals.

Following the joint meeting, the City Council met to consider two additional items:

• Unanimously approved a request to pursue a $1.9 million grant to get rid of lead paint in residential structures. The grant requires a 10 percent match that city officials say will come from its Community Development Block Grant for rehabilitation funding.

• Approved the city 2017 consolidated annual performance and evaluation report. The U.S. Department of Housing and Urban Development requires the report to summarize activities and expenditures using Community Development Block Grant and Home Investment Partnership Program funds.

Major P.J. Connelly and City Council members offered praise and thanks for the response of city employees during Hurricane Florence and its aftermath. Connelly also praised council members for delivering supports to emergency shelters and cleaning storm drains.

“I’ve been talking to the mayor of these (storm damaged) cities and the needs are great,” Connelly said. “If you can, please donate and help out these communities.”

Contact Ginger Livingston at glivingston@reflector.com or 252-329-9570.

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