After years of crisis, Boone County is again financially healthy when it comes to its employee insurance fund.
The Boone County Health and Dental Trust Committee projected at its meeting Friday nearly $500,000 in surplus for the county’s health insurance fund by the end of the year. The Trust also took measures to give back some of that money to county employees with dependents beginning in January 2007.
To simplify premium rates, all additional children after the first will no longer require additional payments. In the past, each additional child added $40 or $50 per month.
An employee with a spouse and three children, for example, currently pays $413 per month. Next year the same family will pay $313 per month, the same rate as a family with one child. Although insurance costs rise every year, the county will use its current surplus to absorb the additional cost of this plan, roughly $34,000 a year.
Times have not always been so good. Between 2000 and 2003, double-digit increases in medical costs and some extraordinarily large claims depleted the county’s insurance coffers “virtually overnight,” said Tom Schauwecker, the Trust’s chairman.
In 2001 and 2002, the county transferred a total of $547,000 to the fund from its general fund and other sources just to stay afloat, said Boone County Auditor June Pitchford.
In 2003, things were so bad that the county withheld a percentage of employees’ salaries based on their earnings to add to the fund, Schauwecker said. Other than 2003, the county has always covered 100 percent of employee health care costs. Employees only have to contribute for their dependents.
The financial crisis also forced the Trust to make some difficult decisions, including eliminating co-pays for office visits, reducing prescription benefits and raising premiums for dependents.
“We really rolled up our sleeves to see what changes we could make,” Schauwecker said.
Schauwecker said the projected year-end surplus — enough to pay for almost 10 months of county insurance costs — is as much the result of the Trust’s hard work as lower medical inflation rates. Medical costs are now rising between 2 percent and 5 percent a year, as opposed to the 14 percent to 15 percent of years past.
“We’ve spent more time on Trust issues in the last four years than in the previous 10 combined,” he said.
Even with the changes in dependent premiums, the current surplus is more than the Trust would like. Eventually, its members want to use the surplus to give back some of the benefits they took when they “rolled up their sleeves” three years ago.
“The changes were done on employees’ backs,” Schauwecker said.
Still, Trust members don’t want to risk giving too much too soon. If they do, and unexpected things happen, they could be right back where they were in 2001.
“We’re acting conservatively behind the curtain because we don’t want to over manage,” said David Lineberry, the Trust’s citizen representative.
Another reason the Trust is being conservative with its surplus is because the county may be liable for higher retiree costs under a new federal accounting rule that will require government agencies, public schools and public universities to report their non-pension benefits, including medical and dental insurance, on their yearly financial reports by 2008. The new rule could greatly increase retiree premiums.
The county will do an audit next year to estimate its liability for retirees, Schauwecker said.