Consider this.

The city and the county provide access to health care insurance to about the same number of employees, approximately 220 employees each.

But, the city also provides coverage for an additional 40 or so Natchez Water Works employees.

Just recently the newspaper reported that the county saved $200,000 on its health care insurance coverage.

The county budgeted $2 million and the cost last year, as reported in the paper was $1.8 million.

The city’s cost for the same period was $1.6 million.

So what’s the difference?

The county is self-insured, which means, the county assumes part of, if not all of the claims risk.

The city on the other had assumes no claims risk. The insurance provider does.

The county pays an additional cost for claims administration.

The city’s claims administration cost is included in its plan coverage.

The county’s payments each month vary according to the number of, and amount of the claims filed.

The city pays a flat premium each month in the same amount.

The county’s employee deductible is $1,000 per employee and $2,000 out of pocket expense.

The city has the same deductible and out of pocket expense. But the city’s plan has an option to “buy-down” the deductible and out of pocket cost. For $12 a month the City employees can reduce their deductible to $500 and $1,000 out of pocket expense.

Three years ago, the city contracted with L S & Associates and cut its health care insurance cost by $185,000. The next year the city renewed its plan and saved an additional $28,000. And this year, the city can elect to save an additional $30,000.

So, the city is insuring more employees at lower cost with better benefits at a fixed monthly cost with no risk exposure.

The problems with employees claims has everything to do with the city and not the plan.

In January of this year, the city was two months behind in primary health care premium payments and three months behind on its supplemental insurance premium payments, i.e. dental, vision and life coverage, which only came to light when one of the aldermen got a call from its life insurance agent.

Payments for insurance coverage is a city administrative responsibility, i.e. the mayor, the city clerk and the human resource director.

The fact that this was never brought to board’s attention can only be either incompetences or indifference or both.

Premium payments of employee health care coverage is not an option. It has to be paid every month and on time.

Last year the city sent out RFP’s in an unprofessional manner.

The city took the current provider’s renewal proposal and essentially “shopped” it by forwarding it to prospective insurers.

Only one additional proposal was received and hardly creditable claiming to be able to save the city $900,000.

Humana did not respond to the request. United Health declined to response citing that it could not compete with the renewal proposal

And Blue Cross Blue Shield was included but only as the claim administrator.

So before the city reconsiders its health care insurance it should first consider the plan it has and if the plan is performing as expected, providing the benefits as promised and saving money each year, which is exactly what the current plan has done. Why then wouldn’t the city renew the plan.

Which is exactly what the board of aldermen did at the special called meeting Tuesday.

It’s a head scratcher alright!
Dan Dillard is the Ward 6 alderman for the City of Natchez.