HOLCOMB — The Holcomb City Council discussed possible changes to its benefits plan for city employees at a special meeting Tuesday.
At the council’s scheduled meeting April 25, City Administrator Robin Lujan provided the council with a breakdown of different benefits available under the State Employee Health Plan, which the city currently uses. On one of the documents included in the breakdown, Lujan wrote that the city’s employer share of health insurance expenses was over budget by about $39,000 due to more city employees enrolling in family plans and the state plan upping its rates.
Lujan included documents comparing employees’ biweekly net pay with the current 90 percent employer/10 percent employee split and their biweekly net pay with the state’s minimum employer participation level. The hypothetical changes were dramatic; if the city changed to the state minimum for employers and pushed additional deductions onto the employees, several employees would see their net pay drop by more than $200 a pay period, according to Lujan’s records.
After much back and forth, the council decided to research other benefits plans, hoping to find one that would help the city stay within its budget while not placing too much of a burden on employees. Should council members go with another plan, they would have to pay an early termination fee of $7,504.82 to the state, according to an invoice included in the breakdown.
At the suggestion of councilmember Nicole Faulconer, the council invited Kevin Harrington, a financial services specialist for Midwest Regional Agency, to help the members consider their options.
Harrington, who is based out of Lincoln, Nebraska, said health insurance is a difficult subject across the board at this time, especially in Kansas, where there are fewer options. He said Holcomb's high percentage commitment was different from private businesses but similar to other cities, though communities with smaller budgets often have to pay less.
He suggested urging employees to switch to a health savings account, or HSA, plan to significantly lower employees’ premiums, or switching dental costs to the employees.
Whether the city decides to keep or leave the state’s plan, Harrington said a plan with Lincoln company Assurity could help employees better manage high deductibles. The company offers inexpensive plans, including those for accidents and critical illness, for employees to use alongside their existing insurance. The plans pay employees back for out of pocket expenses for certain medical costs, making high deductibles easier to absorb, Harrington said.
When discussing options with Harrington, Councilman Ron Schreibvogel said the city was in a predicament. The city needs to spend significantly less money, but doesn’t want to hurt employees, he said.
“If you warn them and tell them that there’s going to be a rise in your health insurance,” Harrington said, the change oftentimes is easier for employees to accept. “I’m finding that companies that warn their employees ahead of time are having a much easier, less volatile time when they actually do.”
Harrington told councilmembers he would send more information to them in the coming days, including information about alternative plans. He said for the city, he would waive his fees and commission.
After Harrington left, the council discussed the possibility of considering other alternative insurance plans, to include hearing a presentation from Shawn Myers of Keller Leopold Insurance in Garden City.
Myers will present his plan at the council’s next meeting at 7 p.m. May 9.