https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
  • Resources
    • Back
    • Resources
    • Webinars
    • White Papers
    • Events
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • Magazine
    • Back
    • Digital Editions
    • Reprints & Reuse
    • Advertise
  • About Us
    • Back
    • About Us
    • Contact Us
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
  • Resources
    • Back
    • Webinars
    • White Papers
    • Events
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • Magazine
    • Back
    • Digital Editions
    • Reprints & Reuse
    • Subscribe to GovPro
    • Manage GovPro Subscription
    • Advertise
  • About Us
    • Back
    • About Us
    • Contact Us
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
acc.com


The self-funding route to lower costs

The self-funding route to lower costs

For more than two years, West Wendover, Nev., has been self-funding the health coverage of city employees - paying the 35 eligible employees' medical
  • Written by Hooper, David; Peterson, Pete
  • 1st June 1996

For more than two years, West Wendover, Nev., has been self-funding the health coverage of city employees – paying the 35 eligible employees’ medical claims directly, instead of paying premiums to an insurance company to cover claims.

“We had a lot questions about going to this type of insurance plan when the idea first came up,” says assistant administrator Judy Mays.

“We don’t like to experiment with things too much around here, but the cost of our previous plan was just making it too hard on our employees.”

Before switching to the self-funded plan, a typical employee paid about $280 a month for family coverage. Now, that employee pays about $130. Each employee must pay a $250 deductible for themselves and for each dependent, with a maximum of $750.

West Wendover, a town of around 2,900 residents, is also saving money with the self funded plan. Previously, the city was facing 10 percent to 30 percent increases in health insurance costs per year. In 1995, with the plan in place, these costs increased about 2 percent.

Each month, the city pays into a bank account that serves as a “claims pool.” According to Mays, the city currently pays $171 for single employees with no dependents; $340 for married employees with one child; and $454 for married employees with more than one child.

A private insurance company designed the city’s self-funded plan and acts as a third-party administrator. The company withdraws money for its services each month from the claims pool, and the city uses the remaining funds to pay employee claims.

May says that previous coverage, provided through the Nevada League of Cities, was more expensive partially because the league’s plan had to cover many different types of employees in different areas.

“This gives you a little bit of room to work with your employees,” May says. “It gets them more involved.

“Self-funding allows us to focus our plan on the coverage that’s best for our workers in our area. We can look at our coverage trends to see what benefits our employees need the most. The more control we have, the more it opens the doors so we can see what types of benefits are out there.”

The residents’ average age of 35 and the city’s remote location, 120 miles from the nearest hospital, are some of the characteristics that West Wendover was able to factor into its plan.

The city has added a variety of benefits to the health care package offered to employees, including an increase in life insurance from $10,000 to $15,000; coverage for oral contraceptives; and an accident provision that pays the first $300 of medical expenses for an off-the-job injury.

In 1993, three of 27 eligible employees obtained family coverage through the city’s fully insured plan. Currently, 18 of the 35 eligible employees have family coverage.

A situation in which several employees have serious health problems and large claims is a potential nightmare for employers who self-fund their employees’ health benefits.

Therefore, West Wendover, like the vast majority of private companies with self-funded plans, purchased stop-loss coverage to pay for any portion of a claim above a certain point. The city has used the stop-loss coverage twice in its two years of self-funding.

“We decided we could afford to risk up to $7,500 per employee per year, so we set our attachment point at that level,” May says. “If any employee has claims that exceed $7,500, our stop-loss coverage pays the rest, and that allows us to keep our risk at an acceptable level.”

Tags:

Related


  • The uncertain future of community composting in New York City
    After roughly a decade of service in New York City, the last two community composting sites will not have their leases renewed. These sites are situated on land belonging to the city’s Parks Department: the Lower East Side Ecology Center is at Corlears Hook Park in Lower Manhattan, and Big Reuse is located under the […]
  • Public safety needs a better way to triage emergency calls
    The overarching goal of the public-safety community is to ensure that 911 callers receive the most appropriate emergency response as quickly as possible. Lives often are on the line in an emergency, and every second matters. Achieving a balance between sending the optimal response to an emergency and having it arrive as fast as possible […]
  • Biden’s relief plan includes $350 billion for local and state government
    President-Elect Joe Biden announced a $1.9 trillion relief plan Thursday to combat the COVID-19 crisis and the economic downturn it has caused. In addition to $400 million to combat the pandemic specifically, the proposal includes $350 billion for state, local and tribal governments that would help them to bridge budget shortfalls, help public works maintain […]
  • University procurement department defends campus against COVID-19 pandemic
    University of South Carolina buyers have established multiple personal protection equipment supply sources and online catalogs that hasten ordering

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • How a unified HR system helps one public safety organization manage crews, payroll, and more in a single platform
  • Fort Bend ISD Meets Student Transportation Needs Safely and Effectively
  • Embracing digital within local government in 2021
  • The 21 neediest American cities in 2021

White papers


How a unified HR system helps one public safety organization manage crews, payroll, and more in a single platform

7th January 2021

Your Roadmap to COVID-19 Funding

18th December 2020

The One Where Everyone Wins: A Mutually Beneficial Contracting Method

10th December 2020
view all

Events


PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

Twitter


AmerCityCounty

The latest episode The Young Leaders Podcast focuses on Cyril Jefferson. Cyril is the youngest African American to… twitter.com/i/web/status/1…

27th October 2020
AmerCityCounty

Hillsboro, Oregon is pioneering a new #renewableenergy generation technology through a partnership with… twitter.com/i/web/status/1…

27th October 2020
AmerCityCounty

The impact of the #COVID19 pandemic on #telework was swift and profound. Now, the big question is whether – and to… twitter.com/i/web/status/1…

26th October 2020
AmerCityCounty

Get ready for the can't-miss webinar on how to kickstart your efficiency improvement plan with Luke Anderson of… twitter.com/i/web/status/1…

26th October 2020
AmerCityCounty

Among all states headed into the 2020 general election, which ones have voting populations that are the most demogr… twitter.com/i/web/status/1…

26th October 2020
AmerCityCounty

We want to hear from you! Share your thoughts in our readership survey to help us shape future content so that we c… twitter.com/i/web/status/1…

23rd October 2020
AmerCityCounty

See how cities different approaches to distribute masks in their communities >> spr.ly/6010GAPLa

23rd October 2020
AmerCityCounty

While #facialrecognition is a powerful tool that can improve law enforcement efficiency, that doesn’t necessarily t… twitter.com/i/web/status/1…

23rd October 2020

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X