Spartanburg County leaders are seriously considering having the county fund its own employee health insurance after provider Blue Choice said it would increase the rate it charges the county for group insurance.
Administrators met Wednesday morning with members of Spartanburg County Council and the Appalachian Council of Governments to discuss their options. The county has also entertained the idea of joining the state health insurance plan.
"Right now, I would say council and staff are leaning toward self-funded insurance," says Deputy County Administrator Jim Hipp. "But we still have a lot of questions to answer about how exactly that will work and what it will cost."
The county is in the process of hammering out a budget for fiscal year 2011-12. Part of the budget has to cover employee health insurance. Hipp says Blue Choice informed the county its rate would increase 14% because last year, Blue Choice paid more in claims than it collected in premiums from Spartanburg County employees.
"If they did that with every group they provided for, they wouldn't be in business," said Hipp.
Hipp says county council felt the rate was too high and negotiated with Blue Choice to lower the cost. He says Blue Choice responded by saying it would increase its premiums 4.2% but reduce the benefits offered under its plans.
"Which would have put us in a position of giving our employees less for more of their money," said Hipp. "That is not what we want for our employees, especially when we haven't been able to give them a raise in several years."
Human resources director Tony Bell says about 1200 employees are currently receiving county health insurance benefits. Under Blue Choice, an employee-only standard plan costs $50 per month and an employee-only enhanced plan costs $84. Bell says when Blue Choice has raised its rates in past years, the county has eaten the cost without passing it on to the employees. But with the budget tighter than ever this year, the increase would have to be passed on.
Of the 46 counties in South Carolina, 35 of them use Blue Choice, which is owned by BlueCross BlueShield of South Carolina. Hipp says Greenville, Lexington, and Richland Counties "self-fund" their insurance, and it has worked well for them.
"It would allow us to design our own plan according to what best fits our needs," says Hipp. "It would also allow us to promote the use of our county employee health clinic and add health and wellness incentives."
He says county staff is still working to find out what would be the cost of "self-funding". He says the county would have to hire a third party administrator, and would likely have to purchase "stop-loss" insurance that would kick in in rare cases where claims exceed a certain dollar amount.
The county will hold another work session to discuss the matter next Wednesday.