SALISBURY – Changes to Wicomico County’s employee health insurance is expected to save the county more than $1.4 million in fiscal year 2019.
In a budget work session Tuesday, Wicomico County’s human resources department and representatives from CareFirst BlueCross BlueShield came before the Wicomico County Council to discuss changes in health insurance premiums that would affect the coming year’s budget.
Michele Ennis, Wicomico County’s human resources director, told the council the county would experience a 17 to 20 percent increase in health insurance premiums in the coming fiscal year.
“Twenty percent would equal $2.5 million for the county,” she said, “which is very concerning.”
County staff attributed the change to an increase in claims and medical costs among the county’s employees. Five employees, for example, had claims more than $150,000, while 20 members had claims more than $75,000.
“That’s what’s driving this,” said Wayne Strausburg, the county’s director of administration. “We have some health issues.”
While they acknowledged the county could take measures to promote better health habits – more than 50 percent of employees have more than one chronic health condition – county staff suggested a “Band-Aid solution” that could reduce the county’s premium increase by more than $1.4 million.
Currently, nearly 1,200 employees utilize a Preferred Provider Option (PPO) plan, while nearly 300 employees utilize an Exclusive Provider Option (EPO) plan. While a PPO plan allows employees to use doctors outside of their health insurance network, Ennis said less than one percent of individuals take advantage of the additional service.
“We have $8 million in PPO claims and only $40,000 are out of network,” she said. “Our employees are paying for something they are not using.”
By moving employees to an EPO plan, staff said county health insurance premiums would increase by more than $600,000, while employees would pay nearly the same out-of-paycheck contribution. Employees who choose to stay on the PPO plan will be required to pay the cost difference.
“That’s a $656,000 increase over last year, but what we are saving is about $1.4 million,” Strausburg said.
Ennis noted that changes to the county’s prescription formulary would also lead to savings.
“There are no changes in copays, but there are removals,” she said. “There are also alternative medications.”