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Sullivan cancels healthcare contract; returns to state insurance program

By Fritz Mayer
November 22, 2011

Sullivan County legislators voted unanimously to cancel a two-week old contract with a company called EBS-RMSCO to administer the county’s self-funded health plan. The sticking point was a “joinder” that county manager David Fanslau was requested to sign, which involved an agreement between EBS-RMSCO and the large health provider Group Health Inc. (GHI).

According to Fanslau, the deal between EBS-RMSCO and GHI may have superseded some of the agreements between the county and EBS-RMSCO, which may have left the county open to liabilities they had not anticipated. Additionally, the agreement between EBS-RMSCO and GHI dated back to April, but the county was not informed about it until November 11, which left lawmakers feeling uncomfortable with the deal.

Further, the deal with EBS-RMSCO was not looking nearly as beneficial has it had in the past. Initially, the move to go with a self-funded plan, administered by EBS-RMSCO, was projected to save the county about 16% over the cost of staying with the plan offered by the New York State Health Insurance Program (NYSHIP). But the percentage had been dropping as the projected increase in the cost of the NYSHIP plan came down. As of November 17, the savings was projected at less that five percent.

Although all of the lawmakers were initially in favor of making the move because it seemed to guarantee significant savings for the county, not everyone thought it was a good idea. County treasurer Ira Cohen warned that it could cause the county significant cash flow problems. In fact he earlier wrote of it, “Self insurance, even with stop-loss insurance, is wrought with so many uncertainties that it constitutes a risk of such great magnitude that is irresponsible, if not potentially reckless.”

Sandy Shaddock, the business agent for Teamsters Local 445, which represents about 600 county workers, was also critical of the plan, and said the change had rank and file workers fearful. At the meeting at the government center on November 18, she had been prepared to once again address the legislature with her concerns about the plan, but because of the development she dropped that part of her public comment.

Along with cancelling the EBS-RMSCO contract, lawmakers also voted to withdraw the cancellation notice it sent to NYSHIP, and county workers will be covered by the NYSHIP plan in 2012.