Crow Wing County is considering switching to a self-funded employee health insurance plan next year.
The Crow Wing County Board discussed the self-funded plan and its current fully insured program Tuesday. If the board decides to change to a self-funded program it would still be under contract with Blue Cross Blue Shield, which would handle all the administrative claims.
In a fully insured program, the insurance company pays all the county claims. If the county has a bad year and has a lot of claims, the county would not be at risk to pay any more money. The disadvantage of having a lot of claims, on the fully insured program, is the insurance company could raise the rate and premium costs for the following year, said Peter Herlofsky Jr., county administrator.
In the self-funded plan, the county pays for the claims. If the county has a good year and does not have a lot of claims, the county would retain the premium costs. This plan includes a stop loss coverage that limits the liability to the county.
Herlofsky said the self-funded plan eliminates the 2 percent tax, which is currently required to be paid by the fully insured vendor.
"This 2 percent is part of the calculation that we are using to allow us to increase some benefits and maintain the current cost," said Herlofsky.
Insurance premiums on the self-funded program are adjusted based upon use the previous year, and actuarial studies predict use for the next year.
Herlofsky proposed that if commissioners go with the self-funded option that the county hire a consultant with Maguire Life Health & Benefits Inc. to manage the insurance program. Cost for a consultant would be about $22,800 a year.
The county board is also looking at offering a wellness benefit to its employees that would allow for yearly physicals.
The co-pay for employees, on either insurance plan, could increase from $7 to about $10-15, depending on the benefit next year.
The county has used a self-funded plan in the past. The fully insured option has been in use since last year.
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