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March 24, 2014

City looks at health care options for employees, chooses to stay put

TIFTON — The Tifton City Council heard from Skip Hill with Partners Benefit Group at last week’s workshop concerning changes in health care.

City Manager Larry Riner said Hill has been handling their health care benefits for quite some time now. He said he finds the best “bang for their buck.” Hill discussed changes in health care due to Health Care Reform and the Affordable Care Act.

Based on the recommendation from Partners Benefit Group, it is in the best interest of the city to stay with Cigna insurance company at this time. Due to Health Care Reform and the claims history, staff will incur an increase to be shared between employee and the city. However, exact numbers will not be known until open enrollment is completed due to different plans that employees may choose.

Hill explained the waiting period for an employee to be eligible for benefits is no more than 90 days. The city will now be required to offer insurance to employees once they have completed 60 days of employment on the first of the month following that date.

He said whether covered under the city or another plan, all copays or any out-of-pocket that an employee pays going forward must be included in that out-of-pocket maximum. The only exception in 2014 will be prescription copays, which will count toward that out-of-pocket maximum in 2015.

He said for this past year, the city had a 130 percent loss ratio. Additionally, with that loss ratio, there are some taxes and fees that the insurance carriers are having to pay due to the Affordable Care Act, one which is called a transitional reinsurance fee. This fee is paid to the government and will be dispersed to insurance companies that are covering high risk individuals.

“That tax will be $63 per year per covered person on your plan, which means that if I’ve got a family of four, then the city of Tifton through premiums will pay a tax of $63 for each person in my family for that 12-month period,” Hill told the council.

He said the increase that was handed down from Cigna, which includes these additional taxes, equates to a 20.79 percent increase for this coming year.

“A mandate is coming in 2015 that if you employ more than 100 employees, you must offer health insurance to anyone who works 30 plus hours a week. That’s considered full time and you’re not going to be allowed to charge them more than 9.5 percent of their W-2 income, whatever on a per pay period basis that they’re paying,” Hill said.

He added, “We made a recommendation to Mr. Riner and Ms. (Carla) Cooper (human resources director) that we go ahead and offer a plan, a third option.” He said currently, employees have two options as far as health insurance — one is a copay plan and the other is a higher deductible plan.

“We are making a recommendation that we add a third plan that meets the requirements of the Affordable Care Act,” he said. “It has a much higher deductible, however, it will allow us to offer a plan that will be much more affordable to the employees, actually cheaper than any plan that is being offered today.”

Hill noted that if they didn’t offer it this year, it would be something that they would have to make available in 2015.

Cooper said in order to comply with Health Care Reform, there are a few changes they have to make in their Employee Handbook. Benefits are required to be offered to employees who regularly work 30 hours in a week or 130 hours in a month. This would depend on the number of employees hired who become benefit eligible. City health care costs for each employee hired for that extra month averages $500. Basic life insurance (.21/$1,000 in salary) for each employee hired averages $5 per month.

Currently in the handbook, it states that a regular full-time employee is someone who has completed the required introductory probationary period for the particular position and is regularly scheduled to work a minimum of 35 hours per week. A regular part-time employee is regularly scheduled to work less than 35 hours per week and has completed the required probationary period for the particular position employed. Part-time employees are not covered by the city’s insurance plan, nor do they accrue vacation or sick leave.

Staff is proposing that the change in the handbook reads that a regular full-time employee is someone who has completed the required introductory probationary period for the particular position and is regularly scheduled to work a minimum of 40 hours per week. Also, a regular part-time employee is regularly scheduled to work less than 30 hours per week or less than 130 hours per month and has completed the required probationary period for the particular position employed.

Councilman Wes Ehlers asked about an employee who may end up with 35 hours in a week. Riner said most of all of their part-time employees are office staff. He said he doesn’t know of any employee out in the field who is part time. He said they will be able to manage that time pretty well.

The proposal is that all regular full-time employees have the option to enroll in the city’s health insurance plan as of the first day of the month following 60 days of full-time employment. Health insurance coverage for dependents is also made available to employees at that time.

Once the changes are approved, the handbook will be updated and notification will go out to all employees, as well as be placed on the employee portal and posted in each department. New employees will be made aware during employee orientation.

In addition, Lois Love, interim finance director, discussed the FY 2014 budget revision. The city adopted a balanced budget for FY 2014 on June 28, 2013. Since the budget’s adoption, ongoing reviews and discussions have been performed on operating revenues and expenditures. Based on these reviews and discussions, the budget revisions are recommended to establish a proper level of funding to cover remaining operating activities in FY 2014.

Love said they’re proposing an increase for technology equipment for the new police vehicles. This is to be funded from the restrictive technology fees, which are set aside for that purpose. She said they set aside five percent of those funds and fees for technology purposes for police and Municipal Court. That was a policy that was established in 2008, she noted.

Love also said 87 percent of property taxes billed have been collected as of the first of February. She mentioned that they are proposing to use available hotel/motel tax funds for the renovation of the Tift Theatre. Projected collections are anticipated to be higher than budgeted, which will equate to approximately $170,000. Riner noted that they need to resolve the moisture issue in the theater’s basement. He said hopefully, they will be starting this project in the near future. He also commented that the city has received the franchise fee check from Georgia Power, which wasn’t included in Love’s report. He said it’s almost close to $1 million.

To contact reporter Latasha Ford, call 382-4321.

 

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John Gamble (right) is joined by John Reid at the Tiftarea YMCA Saturday.

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