OCEAN CITY — Resort officials this week voted to renew the health insurance plan for city employees with a few minor changes, but not before some debate about the comprehensive coverage.
The Mayor and Council on Tuesday approved the renewal of the city’s health, life, dental and other insurance plans after the proposed changes were outlined in a lengthy presentation from Human Resources Director Wayne Evans and Rosanne Calzetta of Bolton Partners, the agency that negotiates the plans with the various carriers, primarily CareFirst. The most significant takeaway from the presentation is that the town’s contribution to the government employee health plans will not go up in the next calendar year.
“We have good news this time around,” said Calzetta. “CareFirst requested a 2.2-percent increase, but Bolton was able to negotiate no rate change for 2018. The billable rates for the Town of Ocean City won’t go up this year.”
However, there were some subtle changes to the various co-pays and other elements of the employee health, life and dental plans, for example, which stirred some debate on whether the plans as proposed presented the best possible coverage at an affordable price for the town and its employees. For example, under the PPO and HMO plans, the renewal includes an increase in the co-pays from $20 to $30 for a typical office visit and from $30 to $40 for specialty care office visits. The increase in the employee co-pays will save the town around $21,000 while the overall adjustments to the plans will result in savings of around $72,000.
However, Councilman Dennis Dare raised concern even the modest increases in the employee co-pays could end up discouraging some workers from going to the doctor for a variety of illnesses and injuries. He used the example of an earache to illustrate his point.
“In the past, we’ve been really big on wellness for our employees, but upping the co-pays seems to be contrary to promoting a healthy lifestyle,” he said. “At some point, an employee with a minor ailment like an earache might go to the doctor and get it fixed if the co-pay is $20. That same employee might not go if the co-pay is $30 and might decide just to deal with it and maybe it becomes worse and ends up costing us more money. There is a tipping point on these things.”
Council President Lloyd Martin agreed there could be a tipping point on co-pays and some employees’ decisions to go to the doctor or not.
“If we have a healthy person, we want to keep them healthy,” he said. “We want them coming to work. That $21,000 we save by raising the co-pays from $20 to $30 can be made up quickly in productivity, or in the opposite, lost productivity. We want to have the best health care available for our employees.”
Dare agreed, saying increases to the employee contributions to the various health insurance plans could end up costing more.
“I certainly don’t disagree we do offer a great employee health benefit plan,” he said. “We’re talking about saving $72,000 here, but we could be talking about even more savings.”
Another tweak in the health benefit plan renewal would raise the required deductible for the Health Savings Accounts (HSA) for some employees from $1,300 to $1,350 for an individual and from $2,600 to $2,700 for a family. With HSA accounts, the city deposits money in an employee’s health insurance plan on a debit card of sorts to use at their discretion for doctor’s office visits and other medical needs.
Councilman John Gehrig said most employees should opt for the HSA program rather than the HMO or PPO plans.
“The HSA has no deductible,” he said. “They get a debit card and the city deposits, say, $1,300 on it at the beginning of the year. That $120 doctor visit comes off their debit card. There is no co-pay because the city put that $120 into their account.”
Evans agreed the HSA programs can be beneficial because the employee has some control over his or her health-related spending.
“The HSA plans make the employee stewards of their money and might make them better consumers,” he said. “They might compare the cost of an urgent care visit to a visit to their primary care provider and realize there is significant savings.”
Another aspect of the health insurance benefit package renewal was the increased cost of prescription medicines. Prescription drugs represent 30 percent of the town’s employee health benefit costs. For that reason, Calzetta said the renewal called for a mandatory use of generic prescriptions when available.
“If a generic is available, there is no charge for the employee,” she said. “If they really want the brand-name drug, they can pay for it.”
However, Dare said in his experience some of the generic drugs don’t offer the same effectiveness.
“I was told by some specialists that the generics weren’t always effective,” he said. “Just because it’s FDA-approved doesn’t mean it’s the same formula. You don’t always get what you pay for.”
Dare said some employees might go the cheaper route with generic prescriptions, only to find their health has not improved or perhaps even worsened.
“If somebody opts to take the generics because they are cheaper, the might not be effective and they can end up with larger problems that can cost even more,” he said.
However, Calzetta said 87 percent of the town employees are already opting for the generic alternatives for their prescriptions.
“That doesn’t automatically mean the other 13 percent are opting for the higher-cost brand-names,” she said. “There are a lot of cases when a generic isn’t available for some medications. This would only mandate the generics be chosen when available.”
After considerable debate, the council voted 5-1, with Dare opposed and Councilman Wayne Hartman absent, to approve the recommended changes and renew the employee health benefit package for 2018.
