Revising County Employee Health Insurance Plans

County Administrator Michael Wanchick reported to Historic City News today that he is pleased with the actions of the County Commission to reform the Employee Health Insurance Plan; a move which Wanchick says “was a critical step for the County.”

The St. Johns County Board of County Commissioners approved a reformed health insurance plan last week that is expected to save $7 million annually. The reform was recommended to the Board of County Commissioners by the County Insurance Committee, which includes representatives from each constitutional officer: Sheriff’s Office, Clerk of Court, Property Appraiser, Supervisor of Elections and Tax Collector.

“As we continue to evaluate each component of the County budget in the face of tax reform and budget cuts, it was imperative that we revise the County’s growing health insurance costs and OPEB liability,” Wanchick said. “The Insurance Committee did an outstanding job of preparing their recommendations, and the County Commission should be commended for their fiscally responsible actions, particularly in light of the limited financial resources the County has available.”

In preparing for the Fiscal Year 2009 budget, the County Commission took initiative to reduce both the rising cost of health insurance for current and retired employees, as well as the mandated Other Post Employment Benefits (OPEB) obligation of $11.5 million per year.

The Insurance Committee has been exploring options over the past several months, and Budget Director Doug Timms presented their recommendations at the July 22 County Commission meeting. The plan included new insurance rates for current employees, to take effect January 1, 2009. In addition to increasing employee contributions, the reformed rates are expected to move more employees to a lower cost plan, thus reducing the dollar amount of medical claims. ESTIMATED SAVINGS are $1 million.

The recommendations also included an increase in retiree responsibility for health care costs, increasing their responsibility from approximately 42% up to 75% by 2012. This significantly reduces both the County’s health insurance costs and its OPEB obligations. ESTIMATED SAVINGS equal $4.6 million.

By coupling the benefits of this health insurance reform with the County Commission’s previous action to create and fund an irrevocable OPEB Trust in June of 2008, the total savings for the County are estimated to be $7 million annually.