Valpo to stop self-insuring city employees’ health care
By James D. Wolf Jr. Post-Tribune correspondent August 26, 2012 9:32PM
Bill Oeding, Valparaiso City Manager
Updated: September 28, 2012 6:05AM
VALPARAISO — After 30 years of being self-insured for employee health benefits, the city has decided to get out of that business.
Come Sept. 1, Valparaiso will become the 18th municipality to take part in the Indiana Association of Cities and Towns’ Medical Trust.
Joining the roughly 2-year-old medical trust is a way to save the city money. However, county employees likely will see an increase in premiums Jan. 1. It’s a minimal amount for continued quality coverage, City Administrator Bill Oeding said.
“The self-insurance has run its course, and I think it’s time,” Oeding said. “We’re just trying to stabilize our costs.”
Health insurance has trended at a 10 percent increase each year, and the city also deals with spikes in the use, which Oeding described as cyclical but hard to predict.
When Oeding presented the plan to the Board of Works last week, Mayor Jon Costas noted it will allow the city to avoid sharp ups and downs in insurance plan use.
The new medical insurance will be backed by United Health Care, and other municipalities have expressed interest in joining the medical trust, Oeding said.
By January, city employees will have a choice of two programs to join through the new insurance plan, one being a preferred provider organization and the other a health savings account, which likely will be less expensive but have a higher deductible.
City officials haven’t chosen yet between the nine PPO plans and two savings accounts that the medical trust offers.
Costas said that offering the two plans will get employees more involved with their health insurance decisions.
“We’re trying to get to more consumer-driven health care,” Oeding said.
City officials plan to meet with city employees about the plan this month, when they’ve chosen which two options to offer employees.
Valparaiso also will find out the city’s costs when they decide on the plans.
Oeding said the city has been looking into a health care alternative for about a year and feels this is the best choice.
“It’ll be beneficial, but it’ll still be good quality,” he said.