Merrillville urged to end self-funded insurance for employees

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Updated: March 16, 2012 8:13AM

MERRILLVILLE — The Town Council is leaning toward switching from being self-insured to having full-funded insurance for its employees, based on the recommendation of a consultant and potential cost savings.

“In my opinion, you’re too small to be self-funded,” consultant J. Anthony Alberico, with Forest Financial Group Inc. in Lake Forest, Ill., told a council committee Tuesday night.

“Even with 139 employees the town was teetering on the edge of whether it should be self-funded,” Alberico said.

The town had 139 employees three years ago and is now down to 105 employees.

Alberico said the town could save about $275,000 by switching to being fully funded by an insurance company. However, it stands a risk of having to pay any claims incurred in a three-month period when it switches over.

Council President Shawn Pettit, D-6th, said he was willing to take the risk.

“At some point we need to rip off the Band-Aid of self-insurance,” Pettit said.

He said the town has been robbing from various departments, including police, to pay insurance costs.

Councilwoman Chrissy Barron, D-5th, said she wanted to see what another insurance broker could offer the town before making a decision, and Councilman Tom Goralczyk, D-4th, asked if the town would be able to switch to Indiana Association of Cities and Towns’ medical trust in December if the price is better. He said the trust was not previously an option for the town.

Town Administrator Howard Fink said if the town is fully insured it can leave a company at any time.

Pettit said it was too late to consider changing brokers since the new plan needs to be effective April 1. He added the matter should have been discussed by the council before Barron talked to another firm.

“We need to have better communication among this council,” Pettit said.

“I just want to see what others have to offer. There’s nothing wrong with getting a better deal,” Barron said.

The council will further discuss the matter at a council workshop session at 6:30 p.m. Feb. 22.