Human resources director Gay Hall and finance manager Kathi Moss presented a tiered plan that would take more money out of employees’ paychecks but keep their coverage the same.
City Manager Shane Hale said the city has been overspending on health insurance for several years, and this plan was likely the only way they could afford to keep offering competitive coverage. The new system, which goes into effect June 1, will make most employees’ deductibles 10 times as expensive.
Hale said several employees have had very high insurance claims in the past four or five years because of “catastrophic events,” and that has raised costs significantly for the city.
“What I understood the trend was, you have one bad year and a couple good years, and that’s not how it was,” he said. “We haven’t really had the down cycle.”
He said the new plan will cover just as many conditions as the old one, although it will cost employees more. Moss said after the meeting that there’s no way to tell exactly how much money it will save until employees start to make claims, but she hopes the higher deductibles will take some of the burden off the city budget.
Right now, all city employees with benefits pay the same rate of insurance costs per month, starting at $50 for a single person and going up to $200 for a family with children. Single employees paid a $250 deductible, which went up to $500 for families. But under the new system, employees can choose from among three tiers of costs. The base plan will cost a single employee $20 per month, with a $2,000 deductible. The “buyup” plan will cost the same as the current system, but with a higher deductible, at $1,500 for a single person. The health savings account will cost $20 per month for single employees, with a $2,500 deductible, but once that deductible is reached, the plan pays for 100 percent of employees’ medical costs.
The plan was presented to city employees at several meetings during the past nine months, and Moss said most people weren’t happy with it, but she and Hall “didn’t get a lot of pushback” about it.
“Anytime you ask an employee to take something out of their pocket, they’re not going to like it,” she said. “But the overall thing was, they understood why we had to do it.”
“You don’t often see deductibles at $250 or $500,” Hall said after the meeting. “It was getting to be so expensive for the city, we needed to raise them.”
Hale said that if the city doesn’t reign in the amount of money it’s spending on health care soon, some types of coverage will have to be removed from the plan.
Councilman Bob Archibeque asked how the higher insurance costs would affect the city’s ability to attract new employees, especially for lower-level jobs. Hale said he believes their plan is still comprehensive enough to attract potential workers, and reiterated that he thinks it’s the city’s only financially responsible option.
Hall said the city’s self-insured plan covers more medical costs than most insurance companies available in the Four Corners area, and he hopes to keep it that way. He said the city’s insurance broker, Wells Fargo, recommended the changes as the best way to avoid reducing coverage.
Although council members spent some time grilling Moss and Hall about the plan’s details, they eventually voted unanimously to approve it. Enrollment is already open for employees, and they have until May 31 to choose a plan.
During the meeting, the council also voted to approve a liquor license for Mi Mexico Restaurant, which is set to move into 550 S. Broadway,.
The council also approved grow expansion for The Herbal Alternative dispensary.
The council They approved an almost $70,000 contract extension for ME&E Engineering to improve the recreation center’s heat, vent and air conditioning system and approved the purchase of 144 new membrane filter cartridges for the Cortez water treatment plant, at more than $105,000 total. They also approved a one-year lease of irrigation water to the Dolores Water Conservancy.