County considers move to self-insured model

By Cliff McCollum
Posted 10/14/16

During their work session this week, the county commissioners discussed options to move the county to a self-insured model for both health and auto insurance.

Bo Hartsfield, executive vice …

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County considers move to self-insured model

Posted

During their work session this week, the county commissioners discussed options to move the county to a self-insured model for both health and auto insurance.

Bo Hartsfield, executive vice president for Cobbs Allen, said he knew moving to a self-insured model on health insurance had been on the county’s radar for a while.

“I know this commission has looked at a self-insured medical plan for four or five years now,” Hartsfield said. “And I can tell you it’s not going to look any different to the average county employee. Really, it becomes a back office accounting function designed to give the county more control over its health insurance plan.”

Hartsfield told the commissioners several of the county’s municipalities had already moved to a self-insured model and had seen some successes in controlling costs to employees and the governments.

“It becomes easier to manage and gives you access to more carriers, which helps us drive down fixed costs,” Hartsfield said.

Hartsfield said the county currently pays $8.2 million annually for its fully insured model. For renewing that same policy system next year, the cost would rise to a projected $8.6 million.

However, under a self-insured model, the projected cost would only be $7.6 million.

Hartsfield said the only variable cost with the self-insured model would be the claims.

“We have a maximum projected cost for the self-insured that is around $9.5 million,” Hartsfield said. “But that’s an absolute worst case scenario, and in 11 plus years of helping groups manage these plans, I’ve never had a client hit that maximum cost. It would take a very catastrophic year to get to that number.”

Hartsfield praised the county’s efforts to start being more proactive with employees’ healthcare, including the biometric scanning offer that the county began this week.

“All of that data is still completely confidential, but it helps the county get a better handle on where employees’ health is,” Hartsfield said.

The commissioners said they were in favor of moving forward with the plan, especially because of the potential savings.

“I think we’re going to save the county employees a lot of heartburn from looking at increased insurance costs over time and save the county taxpayers a lot of money,” Commissioner Chris Elliott said. “It’s definitely a win-win situation.”

Commission Chairman Tucker Dorsey said he felt it was a good time to look at implementing the plan.

“We’ve been talking about this for a long time, but I think it’s time to finally pull the trigger,” Dorsey said. “This can be something that benefits everyone involved and offers us a savings, so we certainly need to look at implementation.”

The commissioners also looked at data showing the county’s auto insurance rates, which showed the county could have had a significant savings if they had moved to the self-insured model years ago.

“If you look at the variance column going back all these years, you can see each year looking back to 2010, there would have been a significant savings to the county if we had implemented self-funding,” Elliott said. “Anything we can do to save money on our end for the taxpayers, we certainly need to be looking at.”

County staff said they would continue to study their auto insurance options and come back to the commissioners with their options at a future work session.