The Brazil City Council may have found a way to ease insurance costs shouldered by city employees.
The council decided Tuesday to examine the possibility of hiring a benefits consultant, who would protect the city from hidden fees and ensure that insurance coverage for city employees complies with state and federal standards. Council members voted unanimously to open an escrow account which would eventually be utilized as the basis for a Health Reimbursement Arrangement (HRA), a fund which would assist employees with some treatment costs.
The council also agreed to schedule a special meeting Jan. 5 to allow City Attorney Joe Trout, who was absent at Tuesday's meeting, to examine the legal ramifications of such an agreement.
Dabren Clark, a group benefits consultant with ONB Insurance Group, told council members she could reduce overall insurance costs for the city and its employees. As the city's benefit consultant, Clark claimed she would eliminate commission fees built into the city's agreement with Humana Healthcare and its other insurance providers.
The savings would be considerable, as the Humana plan includes built-in commissions totaling $33,487. Providers of dental and vision coverage also include commissions in their contracts, and Clark said she believed she could save the city around $40,000 in total commission fees in 2006. Clark proposed a three-year contract that would cost the city $20,000 annually.
In addition to savings on commission fees, ONB would provide protection against fines for compliance violations and ongoing service in the form of regular meetings with city officials. Councilman James Sheese said the proposal seemed too good to ignore.
"We could do the same plan we have, not do the (HRA account), and still save our employees money," he said. "If we can lower our premiums, I think it'd be well worth our while to do that."
At its Dec. 13 session, the council approved a bid from Humana for employee health insurance for 2006. The Humana plan will save money, coming in nearly $240,000 less than what the city had appropriated for employee health care in 2006. But some council members, as well as a number of city employees, voiced concern over the policy's $1,000 deductible, double that of the city's previous provider, Anthem Health.
Clark told the council that higher deductibles are becoming more and more common, but a service like hers allows large employers to counter those increases by saving in other ways.
"Now, more than ever, we have to be better educated on how we use our benefits, or we are going to be the ones who pay the price," she said.