St. Johns County commissioners voted unanimously Tuesday to stair-step increases in health insurance premiums after employees expressed concerns about a sudden shift in the burden for covering the ballooning costs of the county’s health plan.
Commissioner Jay Morris broached the topic during closing comments, saying “quite a few” employees could end up making less money than they made in the previous year if they had to take the full hit all at once. He asked other commissioners to consider chopping the increase in half to be instituted over a two-year period rather than requiring the full increase starting Jan. 1.
“A lot of these people could do better in the private sector,” he cautioned. “… I’m afraid you’re going to lose some very good people.”
Morris also said the county’s benefits package has always been a “big plus” for the county in terms of attracting and retaining employees.
Other commissioners shared similar concerns.
Commissioner Henry Dean said he fully supports taking a phased-in approach to soften the blow, especially considering many employees stuck it out through the economic downturn, during which six years went by without pay increases.
In June, commissioners supported a plan that called for pushing the expenses back onto employees due to budget restraints and the increasing costs of maintaining the self-funded plan. At the time, County Administrator Michael Wanchick said the problem had been building up for about a decade and was exacerbated by the costs associated with claims made by retirees in the system.
Over the previous few months, the board had called for county staff to seek efficiency measures, such as putting management of the county’s health insurance out to bid or tinkering with the types of plans available. The increase was 18 percent in 2017 and was projected to climb even higher in 2018, barring any changes.
On Tuesday, County Administrator Michael Wanchick said it was increasingly apparent the county’s initial projections were more conservative than necessary. He said rates have “normalized” and the county would be re-bidding its contract for management of the health insurance plan in a “very competitive” environment.
Wanchick said the discussion on rates took the better part of the year and that there were just two options in the end: do the increase in one step and reconcile the account or phase it in over two years.
He said they decided to “bite the bullet” and put the issue behind, opting for the one-step solution, but adding that was “before a lot of us talked with employees one-on-one and heard some of the comments.”
Wanchick said it was ultimately clear to him that the “more prudent course of action” was to ease employees into the increase, although he also made it clear the full increase will need to be absorbed by the employees rather than the county.
“At the end of the day, somebody’s got to pay these bills and we’ve got to balance our budget,” Wanchick said. “There’s no side-stepping the issue. There’s a little different timing, perhaps, but we’ve got to come to terms with it.”
“This was a little too far, too fast for them,” he added.
Commission Chair Jimmy Johns said he’d be in favor of no increase if they could balance the budget.
Stacey Stanish, director of personnel services for the county, said the individual rate for the county’s Preferred Provider Organization plan was previously proposed to go to $100, but would be going to $50 instead. She said there are four tiers altogether, each of which will see their immediate increases cut in half.
County Attorney Patrick McCormack clarified the increase in rates would be cut in half with the expectation the remainder of the full increase, adjusted up or down, would be applied the following year.
Officials said there would be little or no change to the county’s high-deductible plan.