County commission considers rising health care costs
CHARLESTON, W.Va. - Rising health care costs are one of the biggest issues faced by public agencies nowadays, and Kanawha Commission President Kent Carper believes the county will have to explore ways to reduce its burden.
This could include asking employees to pay more than the 20 percent of the total premiums, he said.
But Charleston Mayor Danny Jones does not believe the city is "at that point yet."
"And I don't know if we'll ever reach that point," Jones said.
The county commission pays 80 percent of employees' health premiums, according to figures provided by Chief Fiscal Officer David Fontalbert. This formula hasn't changed for about five years, he said.
About five years ago, the county paid 82 percent and the employees picked up the other 18 percent of the premiums, Fontalbert said.
The county budgeted about $5.8 million for health care costs this fiscal year, he said. That includes the $200,000 administration fee to Blue Cross Blue Shield, as well as other fees, Fontalbert said.
The employees' budgeted contribution is $885,000 for the current fiscal year, he said.
"The commission picks up the lion's share of the cost," Fontalbert said.
Charleston officials have budgeted about $8.98 million for health care costs during the current fiscal year, Finance Director Joe Estep said.
The employees' contributions to the premiums are 21.7 percent while the city pays 78.3 percent, City Manager David Molgaard said.
The percentages paid by city employees versus the city is based on the total amount of health care costs incurred in the previous year, he said.
Therefore, the percentage picked up by the city changes every year, Molgaard said.
Last fiscal year, employees picked up 26.1 percent of the insurance premiums while the city picked up 73.9 percent, he said. The year before that, the city paid 73.8 percent and the employees picked up 26.2 percent.
The city and the county are self-insured, meaning both agencies pick up health care expenses for employees.
Like Carper, Molgaard believes the rising cost of health care, and the strain it puts on local budgets, is one of the greatest challenges agencies need to overcome in the future.
"In my judgment, medical costs rise at a significantly higher rate than other costs associated with the workforce," Molgaard said. "I think this will continue to be a challenge."
Molgaard pointed out that the city officials examine health care costs, and the percentages paid by the employees, every year around the time the budget is drafted.
Carper noted that calling the county's plan "insurance" is a misnomer since the county picks up the cost.
He has advocated that county employees again join the state Public Employee Insurance Agency plan to cut down on costs.
However, those attempts to rejoin the state program have been unsuccessful, he said.
"So what else can we do?" he said. "Are we supposed to reduce the benefits and raise the premiums to the point that people don't really have insurance?"
However, county officials are looking into ways to reduce health care costs, like asking employees to pay a larger percentage or a higher co-pay, he said.
"We're having to look at all of that," he said.
Jones believes requiring employees to pay a higher percentage of the premium would negatively affect morale.
"We have a great work force, and a great work culture at the city," Jones said. "We don't want to do that unless we really have to."