County in insurance crunch

Posted 2/18/10

“You talk about the ‘wow' factor,” said Commissioner Tim French at a Park County Commission meeting earlier this month. “Wow.”

On Tuesday, county commissioners re-directed $200,000 of this year's budget to cover …

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County in insurance crunch


Park County's budget for paying employees' health insurance claims has run dry.In December, the county had a roughly $232,000 shortfall between its insurance revenue — such as employee premiums — and costs — such as pay-outs. In January, additional losses topped $225,000, all but tapping out insurance reserves.

“You talk about the ‘wow' factor,” said Commissioner Tim French at a Park County Commission meeting earlier this month. “Wow.”

On Tuesday, county commissioners re-directed $200,000 of this year's budget to cover health insurance claims, using money that had been set aside for wage increases.

The commission plans to hold a special meeting on Monday to determine what changes they will make to the county's self-insured health plan to get costs down.

Insurance claims on behalf of the more than 200 employees covered by the county have been higher in cost and greater in number in recent years.

At the start of the current fiscal year in July 2009, the county raised its employees' monthly premiums by $27.50 for singles (about 7 percent) and $82.50 for families (about 11 percent), but the increase hasn't been enough. As Park County Clerk Kelly Jensen puts it, “it got worse and (then) it got worse.”

In July 2008, the county had more than $1 million in an insurance reserve fund. In July 2009, there was less than $600,000 in the account. At the end of last week, it contained a scant $6,900, raising concerns that the county would not have the money budgeted to cover the expenses.

“We don't have the ability right now to pay the claims tomorrow,” said Jensen on Tuesday, though she added that around $90,000 in insurance-related checks were expected to arrive soon.

“If we overdraw that account, we are in deep doo-doo. Big time,” added County Treasurer Nena Graham-Burke.

The county has millions of dollars available in other reserves, but they must go through a formal public hearing before being transferred to the insurance account.

The county's third-party insurance administrator, Meritain Health, has suggested three cost-cutting alternatives for the commission to consider. An insurance committee made up of county employees has been examining those alternatives and will make recommendations to the commissioners at Monday's meeting.

The committee had been asked to have its suggestions ready on Tuesday, but Pam McMahan, a deputy in the county assessor's office and a member of the committee, said the group needed more time to make sure they got it right.

McMahan said the committee expects to recommend changes that save somewhere between $400,000 and $500,000 a year. One of the changes likely to be made is an increase in employees' co-pay, which is currently $35 on outpatient visits.

In addition to shifting the $200,000, Commissioner Dave Burke and Commissioner Bucky Hall voted to pull $500,000 from county reserves to cover potential coming shortfalls in claims payments.

“I'm not standing here saying I want to spend $500,000; I'm standing here saying I want to pay our bills,” said Burke.

Jensen said savings from any changes to the county's insurance plan will not be realized for some time.

“You have a few months of claims cycles you're going to have to cover,” she said, adding, “I think $500,000 is a conservative estimate of what you're going to be needing over the next several months.”

However, Commissioner French said he wanted more information and firmer numbers on how much money the county will actually need before voting to draw money from reserves.

“It's just like there's confetti in the air, (and we're) grabbing at it,” said French.

He and Commission Chairman Jill Shockley Siggins voted against advertising a transfer from reserves, and the motion failed on a 2-2 vote.

Commissioner Bill Brewer, who has been suffering from heart problems, did not attend Tuesday's meeting.

Siggins opposed pushing a decision back to Monday.

“I think it's incumbent on this board to make tough decisions today,” Siggins said. She noted that the board delayed making a decision last week as it waited for information from Meritain.

However, any change the county had made to its insurance plan would not take effect until March. Waiting a week will not change that, McMahan said, but it will give the insurance committee time to better review alternatives.

Burke said the county needs to carefully look at what kind of impacts the changes will have on its employees.