County Facing Costly Health Insurance Hike

The Fayette County Commissioners Court spent about half of their 2½ hour meeting last Thursday discussing ways to save money on employee health insurance.

Clarissa Messinger and Brian Naiser from Texas Association of Counties (TAC), the County’s health insurance provider, appeared at the meeting. They said the County faces a 9.7 percent increase in health insurance costs under the current coverage plan. That’s a few percentage points higher than the rate of inflation for medical services, Naiser said. Other counties in TAC’s insurance pool are seeing an average increase of about six percent, he said.

Messinger said the big increase for Fayette County was due to an unfavorable loss ratio, which is a measure of claims divided by premiums. She said Fayette Count’s loss ratio over the last 12 months was 149 percent. That means TAC paid about one and a half times as much in claims as they received in premium payments from the County. She said TAC aims for a loss ratio of 94 percent. At that ratio, TAC can pay for all employee medical expenses with about six percent left over to cover administration costs.

The TAC representatives said a few big insurance claims last year drove up Fayette County’s loss ratio dramatically. Four County employees were responsible for more than $200,000 each in claims, and one was for over $1 million. Those top four employees were responsible for 58 percent of all claims. Cancer treatments were the primary driver of the top claims, they said.

Messinger and Naiser offered a couple of alternatives to save the County money next year. The County currently offers two types of insurance plans to its employees: a Health Reimbursement Arrangement (HRA) and a Preferred Provider Organization (PPO) plan. They said the County could realize some savings by placing all employees into one plan or the other. The County could also increase contribution amounts for spouses and children.

Messinger and Naiser said Fayette County offers some of the most generous insurance benefits out of the nearly 200 counties that they service.

Commissioners will need to inform TAC of any changes to its insurance plan by June 27. They took no action at the meeting last Thursday. They decided to hold a special workshop meeting on Monday, June 16, to discuss possible changes to the insurance plan and contribution amounts. They’ll vote on those changes at their next regular meeting on June 26.