Changes mean county saves on health insurance

Boone County has taken measures to radically change the way it handles its employees’ health insurance this year, and it has already started to see returns on those investments.

One change was hiring Sundvold Financial’s Tom Kayser as its employee benefits consultant. For the first time, the county sent out a request for proposals for an employee benefits consultant. Melinda Bobbitt, the county’s purchasing agent, handled the request. She said seven companies responded and Sundvold Financial was selected.

Kayser’s job is to market the administrative handling of the county’s insurance to local carriers — such as Mercy Health Plans, UnitedHealthcare, Aetna, FMH and the county’s current carrier, Blue Cross Blue Shield — to get the most competitive rates.

Boone County Auditor June Pitchford said one of the reasons the county sent out the request this year was to increase its financial transparency and to have someone working directly for the county.

In the past, the county paid the full premium to insurance companies, and the insurance companies in turn paid brokers’ commissions and fees.

Now the county pays only a flat fee for consulting. This means Kayser — who earns no commission — can present the county’s plans with only its best interests in mind, Pitchford said.

The approach seemed to work. After receiving Blue Cross Blue Shield’s renewal offer for 2007, Kayser negotiated for the county and got the price reduced — for precisely the same plan — by $27,000. That’s a 7.7 percent decrease from its first offer of $351,000.

Kayser said Boone County is at the forefront of health coverage because it has an active Health and Dental Trust Committee, which is made up of representatives from several Boone County departments and two Columbia residents.

This diverse makeup is an important part of why Kayser thinks Boone County is doing much more than other counties to hold carriers accountable for their prices.

“That’s why the county is unique,” Kayser said. “They have representation from all levels. They’re in touch with how any changes will affect their employees.”

Together, the committee meets with Kayser and is responsible for making decisions about how the county will handle the insurance of its more than 400 employees.

There may be another important change in the county’s insurance coverage in 2007. The committee is considering increasing its specific deductible from $75,000 to $85,000. This would put the county at higher risk — $10,000 per employee or dependent — but would lower fixed costs an additional $67,000.

Kayser is also in the process of marketing and negotiating the county’s other lines of insurance.

Although the county is still new to this arrangement, Pitchford said she is excited about the county’s new method.

“I think it’s moving forward as we thought,” she said.