County supervisors, Jeff council consider insurance costs

Employee health insurance benefits were on the agendas for both the county board of supervisors and the Jefferson city council this week.

The supervisors discussed changing the county’s third party administrator (TPA) from Wellmark to Cypress Benefit Administrators after Sandy Scheuermann (insurance broker with Paradigm Benefits) suggested a savings of 14 percent by making the move. Scheuermann presented information pertinent to the county’s renewal of benefits at the Oct. 26 meeting.

Scheuermann said the county would avoid a 13 percent cost increase Wellmark planned for the coming year, and that Cypress now costs 1 percent less, yielding the 14 percent savings. The preferred provider organization (PPO) would be Midlands Choice, a network Scheuermann said includes almost every provider county employees now use. The exception was a pair of Jefferson chiropractors, who Scheuermann said could very easily become Midlands Choice providers.

Supervisor Tom Contner called the decision “kind of a no brainer.” Because Scheuermann’s presentation was on the agenda as informational, the supervisors put the item on the Nov. 2 agenda for a decision.

At the Nov. 2 meeting two or three county employees asked more detailed questions about the proposed change. The supervisors delayed the decision and asked that a Cypress representative come to the next meeting.

Julie Kohanek, who works in Cypress’s Omaha office (the company is headquartered in Appleton, WI) was present at the Nov. 9 meeting to answer questions and provide assurances. She explained that Cypress garners savings for customers by giving an “eyes on” look at 70 percent of the claims it handles, rather than the 10 percent of claims actually looked at by large carriers. Because the county is self-insured, vigilance of those reviewing claims results in cost savings to the customer – in this case, the county.

Kohanek used the example of a $650 charge on a bill from a particular hospital for a nurse inspecting an infant car seat before the newborn was sent home. When the claim reviewer telephoned the hospital to ask about the charge, it was taken off the bill. Had the claim been auto-adjudicated, the insurer (in this case, the county) would have paid it.

After all reassurances that employees will see little change, the supervisors voted unanimously to switch to Cypress as the county’s third party administrator. The change will be effective for employees Jan. 1.

The Jefferson city council at its Nov. 10 meeting approved renewing its health insurance plan with Wellmark at an increase of 13.43 percent (about $3,000 per month) in premiums. The city’s insurance broker (Rod Brooks of Paradigm Benefits) got quotes from Wellmark, Coventry, United Health Care and Health Alliance and found Wellmark’s quote to be the most favorable.

The city has not seen an increase in premiums in the past two years, but the council has set aside money each year for the eventuality of an increase. The council expects to cover the increase without increasing the tax levy specifically for that purpose. The city does not intend to pass the premium increase on to employees at this time.

 

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