“Self insurance, even with stop loss insurance, is wrought with so many uncertainties that it constitutes a risk of such grate magnitude that is irresponsible, if not potentially reckless.” Those words were written by Sullivan County treasurer Ira Cohen and read by lawmakers David Sager at a special meeting of the legislature on September 22.
Most of the lawmakers did not agree with Cohen, and they voted seven to one to move forward with ending the county's insurance coverage with the New York State Insurance Program (NYSHIP), and instead become a self-insured county with a third party administrator, EBS-RMSCO, running the program.
Initially officials projected that the county would save $1.7 million with the switch. That was lowered to an estimated $1.2 million, but facing a $13 million deficit for 2012, the majority of lawmakers thought it was too good a deal to walk away from.
With the NYSHIP plan, the county pays monthly premiums and NYSHIP pays the claims. Under the proposed plan, the county will be responsible for paying the claims. But two separate re-insurance policies allow the county to be responsible only for claims up to $250,000 for any individual and about $16 million overall. Any costs beyond those levels will be covered by the re-insurance or "stop-loss" policies. The county, however, would have to lay out the cash and then be reimbursed, which is in part why Cohen feared it could create a cash-flow problem for the county.
County chairman Jonathan Rouis, however, said that even if the county had to borrow some short term funds, which the county does from time to time, it would still realize significant savings with the change.
Teamsters Local 445 business agent Sandy Shaddock, who represents about 600 county employees, said her members were fearful about the switch. She promised that if the new program delivered fewer services that the NYSHIP plan, the union would take the necessary steps to force the county to comply with the contract, which stipulates that health car coverage must remain essentially at the same level.
Officials have said that new coverage will be a mirror image of the old, and said that within the next six weeks EBS-RMSCO would undertake an education campaign to answer questions county employees might have. Shaddock said after the education campaign was complete, she would ask her members to vote on whether they wanted to offer the county a concession worth $1 million in exchange for keeping the NYSHIP coverage.
SULLIVAN COUNTY LEGISLATURE APPROVES SELF-FUND HEALTH/PRESCRIPTION/DENTAL INSURANCE PROGRAM – AT LEAST $1.2 MILLION EXPEN SE AVOIDED IN 2012, PLUS WELLNESS INITIATIVES, ENHANCED BENEFITS, AND BETTER COVERAGE
Monticello – The Sullivan County Legislature today approved a self-funded Health/Prescription/Dental Insurance Program that was negotiated through a Request for Proposals process, and recommended by County Manager David Fanslau. The workgroup that put in many hours researching and analyzing the program included Fanslau, Deputy County Manager Joshua Potosek, Human Resources Director Lynda Levine, Purchasing Director Kathy Jones, Risk Management and /insurance Director Monica Farquhar Brennan, and Deputy Commissioner of the Division of Management and Budget Janet Young.
“After a lot of hard work and recommendations from our county staff, I am excited to report that the County Legislature voted to implement a new, self-funded Health/Prescription/Dental Insurance Program administered through EBS-RMSCO, Inc. This new program will offer cost savings to the county, comparable care to what employees and retirees are receiving now, and an innovative healthier workforce program to offer our employees and retirees,” said Legislator Alan J. Sorensen, Chairman of the Government Services Committee.
“The cost avoidance that this program will realize is critical to the County’s budget process in 2012 and beyond, particularly when we are realizing reduced revenues and State Aid, and a new property tax cap law,” said Jonathan F. Rouis, Chairman of the Sullivan County Legislature.
“This change will permit the County to reduce the cost of health care by $1.2 million in health insurance expenses in 2012. These cost savings will also help to reduce the burden of employee health benefits on taxpayers and is one step the County has taken to take to get our fiscal house in order,” added Legislator Sorensen.
The self-funded plan will mirror the current plan documents that are in place through the New York State Health Insurance Program (NYSHIP), which will essentially become Sullivan County’s plan documents. Included in the service agreement are wellness programs, and disease management programs.
“Throughout the due diligence process, I have insisted that the self-funded program would be a good plan, and provide more coverage, not less coverage. I have also insisted that as a priority of mine, that all subscribers (employees and retirees) will be educated on the details of the self-funded plan, as there is nothing worse than dealing with unknowns when facing healthcare issues,” said Legislator Jodi I. Goodman, Chair of the Management and Budget Committee.
“Covered and eligible employees and covered and eligible retirees that currently have treatments, prescriptions, and diagnoses approved and covered by NYSHIP will have those same services approved seamlessly through the self-funded plan. If it is covered by NYSHIP, then it will be covered under the self-funded program. All current co-payment schedules for providers and prescriptions will remain the same as they are currently under NYSHIP,” said County Manager David Fanslau.
Retirees that are Medicare primary will actually receive an enhanced benefit over the NYSHIP program, and the County will realize a reduced cost for the enhancement. Basically, if a medical provider accepts Medicare, then this program will cover 100% of costs above Medicare, and there will be no need for the medical provider to be in a network. Any retiree that is not Medicare primary eligible will be covered through the self-funded program, with the same coverage that they now receive from NYSHIP.
The County Manager will facilitate numerous educational sessions to be conducted by EBS-RMSCO, INC. that will commence next week. These sessions will educate and inform the County covered and eligible employees and the covered and eligible retirees about the self-funded Health/Prescription/Dental Program that will essentially convert the current NYSHIP plan to be the Sullivan County Plan Documents; and to review the network of providers, and take appropriate steps to realize as many of the current providers providing medical services to County subscribers, to be included in the Sullivan County network of providers as possible.
A feature that will potentially reduce plan costs is an innovative Interactive Health Solutions Program (IHS) that will be offered to County employees. This innovative program has been credited with catching serious illnesses and diseases in early stages that produce a better healthier outcome for participants, and reduced claims expenses for the plan.
“The self-funded program will not be limited to a single network of providers. This program will permit EBS-RMSCO, INC. to place subscribers in the network that is the best fit for them, as well as, the best network for the plan. Also, this program will allow EBS-RMSCO, INC. to recruit providers into Sullivan County’s network, providing a great deal of flexibility,” concluded Fanslau.