City Costs of Providing Health Insurance for Employees Going Down

November 12, 2017
by: 
Dwayne Page
Smithville Mayor and Aldermen

The City of Smithville will be saving money on the cost of providing health insurance coverage for its employees next year.

During Monday night’s monthly meeting, City Administrator Hunter Hendrixson informed the Mayor and Aldermen that according to the city’s health insurance provider, the overall renewal cost is going down by 6.5%.

“About four years ago we switched from the Tennessee state plan to Blue Cross Blue Shield with Health Cost Solutions of Hendersonville. They assured us they would save the city money. Smithville Electric System also got on board with it. Last month we received an email from Tim Herndon of Financial Blue Print sharing the news about the lower medical insurance rate to the city,” said Hendrixson.

Reading from the letter, Hendrixson said “We love to provide good news about group medical insurance. We rarely have the chance to do it. Great news!. Your medical insurance rate is actually going down in 2018. I have attached the BCBS of TN renewal piece of your plan and it’s going down 5.9%. When you bake the new BCBS rate into the cost of Health Costs Solutions (a third party which oversees the city’s plan) your overall renewal cost is going down about 6.5%. When you add up the estimated total amount of money the City of Smithville and Smithville Electric System combined have saved over the last four years compared to the state plan, the amount is $1,335,920”.

According to Hendrixson, the City of Smithville pays 100% of its employees’ and elected city officials health insurance premiums. Smithville Electric System, which is a separate entity, pays 100% of the premiums for family plans of its employees and board members. The city has about 50 workers. SES has 10 employees.

Alderman Josh Miller asked what the cost would be for the city to pay the premiums for family plans

“Its rather expensive. Unfortunately that’s the only draw back. I see in some ways we’re saving to where we could put it out there but I don’t know how long it would last. Things change from year to year. I would hate to start it this year and then next year find out we can’t do it. Unfortunately once you go to the family plan regardless of whether you have one person or four or five people it goes up. But for next year’s budget we could get numbers,” said Hendrixson.

Alderman Shawn Jacobs asked whether former city employees in good standing could continue to carry insurance after they have retired.

“Once you separate from service from the city assuming you are in good standing and you put in your 30 years and retire or whatever, I wonder if you could take that insurance with you. Would it increase our costs that much if we allowed that employee to take that insurance with them if they paid the entire premium which I would think would still be a lot less for them,” asked Jacobs?

“I don’t want to cost the city any more money but people are hurting when it comes to health insurance and if we can help them get it without costing us too much money, I think its good. For someone who has devoted his or her life to serving the city it would be a little perk to take with them,” said Jacobs.

“I think we would need to get with Health Cost Solutions and let them put the numbers together,” added Hendrixson.

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