Finding a health insurance premium option that would benefit the city's budget, city employees and the citizens proved to be a real challenge during Monday night's Indianola Board of Aldermen meeting.
Even after a lengthy discussion that lasted nearly an hour-and-a-half, the city fathers were still unable to take any definitive action to renew the employees' health insurance policy for the upcoming year.
The city leaders have acknowledged during prior sessions that other insurance carriers have been reluctant to insure the city's workers because it causes them to operate at a loss.
And this year the current provider, Blue Cross & Blue Shield, is instituting a $232 per employee, per month increase over last year's rate for the policy period beginning July 1. That could be a $278,400 annual cost increase for the city.
BCBS representative Kent Barrett presented three options to the city leaders.
Option one would allow the city employees to keep their existing benefits, which includes only a $1,000 annual deductible and a $50 pharmacy deductible but would result in the huge premium increase.
Barrett said, “We have very few options in Mississippi because we are a sparsely populated state and it's magnified and exacerbated when you get into the Delta area because it is even (more) sparsely populated and many carriers just don't want to fool with us quite frankly.”
He said because of the size of the city's employee base other insurance carriers may give a quote but won't quote them at the current health status.
He said the rates other companies offered would make the current rates look good. He added that Blue Cross should be adding more for the cost of their coverage, but they just choose not to.
Two motions were introduced by the leaders, but both failed to get approved.
Alderman Darrell Simpson made the first motion to go with option three, which would only increase the city's annual premium by $175,476 over last year's cost.
The drawback is that the out-of-pocket expense for hospital stays would increase to $5,000 per year with an $8,150 annual maximum out-of-pocket expense.
Under that option, the pharmaceutical deductible would also increase from the current $50 per year to $250 annually with a waiver for tier one medications.
The city pays the entire cost for the majority of its employees and that would be $648.23 per year, per person under this option; however, that motion failed after Simpson and Alderman Gary Fratesi were the only ones to vote yes. Aldermen Ruben Woods, Marvin Elder and Sam Brock voted no.
A subsequent motion by Woods to adopt option two, a $214,380 increase over last year, also failed. Option two reportedly carried a lower out-of-pocket cost at a rate of $680.65 monthly, per employee. Woods and Elder voted yes, Fratesi and Simpson voted no and Brock abstained, which necessitated in Mayor Steve Rosenthal casting the deciding no vote. He indicated that he was for option three.
Brock asserted that the city should not to go “into the red” to provide coverage and asked where they would get the money.
Rosenthal said, “To get $214,000 we'll probably need to let go about five people and not our lowest paid people.”
However, he stressed that he was not for furloughing or laying off any of the city's employees.
Both Rosenthal and Fratesi mentioned the impending decrease in sales tax revenue due to the COVID-19 pandemic.
Fratesi mentioned other budgetary expenditures and the likely burden that raising the millage to meet the rising costs of insurance would place on the citizens.
A discussion ensued between him and Woods, who had a differing opinion on how much the millage could be increased.
After continued discussion, which highlighted the need to make a decision before the June 15 deadline, Simpson then made a motion to revisit option three.
Rosenthal stated, "Which is the least of the worst. It's the lowest increase, but it does put a little bit more burden on somebody if they go to the hospital.”
However, the motion to revisit also failed on a 3-2 to vote.
Originally Brock had voted to abstain, citing that he was not clear on what was being presented, and after some clarification, Rosenthal again called for Brock's vote, but that time he voted no.
The monetary difference between options two and three equates to about $32 per month, per employee and based on an average of 100 employees it equals to a difference of about $38,400 annually, according to Rosenthal.
"So, that's at least one employee, one-and-a-half employee's salary," Rosenthal said.
He asked the board members how they planned to recoup the $32 difference and queried if they would now require each employee to contribute that amount.
Woods said that Rosenthal's math suggested that the city would be paying the entire amount, which was not accurate.
"We're going to pass part of that on to the city employee," he said.
Rosenthal said, "It sounds easy when you're voting on it, but we're going to start cutting employees come next budget year."
Although three options were presented, Rosenthal stated, "In my mind we only have one."
“Tonight we need to make a choice of which option and then at a later date we can talk about employee share,” Rosenthal said.
The city could still offer individual employees the option of choosing a lesser deductible if the employee is willing to pay the difference in the cost.
Currently only a portion of the city's employees pay into their monthly premium for health insurance and the top salary people reportedly only contribute about $38 per month.
"We have to think about what are our options and what is more important," Rosenthal said.
If the leaders do not make a decision and notify Blue Cross Blue Shield by June 15, the insurance company could give the city a one-month extension from July 1 to August 1; however, BCBS would charge the city the higher premium rate of $734 per employee for that month, which would cost the city in excess of $73,400.
By law the city has to offer at least a high-deductible plan in order to avoid a $2,700 per year, per employee penalty. A decision Monday night would have only selected a plan to present to BCBS and the city leaders would have to discuss employee options at a later meeting.
The Aldermen opted to discuss the matter at their next official meeting in June which would only give them a week before the June 15 deadline.
