GENEVA – Kane County could pay 9 percent more to provide county workers with health insurance next year, thanks in no small part to the Affordable Care Act.
But Kane’s insurance consultants say the county could save hundreds of thousands of dollars over the next few years, if not in 2014, if it changes how it insures its workers.
Representatives of Libertyville-based employee benefits consulting firm Global Benefits Group on Tuesday presented the Kane County Board with a breakdown of what the county should expect to pay in 2014 to insure its more than 1,200 employees.
Global president Laurence Marx told the board that the county should expect to pay about $15.5 million next year, or about $1.3 million more for employee health insurance benefits through Blue Cross/Blue Shield.
Marx said the increase was driven by several factors, including more claims. In 2013, he said, the county government will pay $13 million in claims, or about 4.3 percent more than last year when compared to premiums.
The increase ends a string of years in which Kane County government paid less in claims than the year before.
But Marx said market-driven increases accounted for only about 60 percent of the $1.3 million increase. The remaining 40 percent of the increase can be ascribed to fees and other charges associated with the federal Affordable Care Act.
With that in mind, Marx said the county could consider transitioning the county’s insurance coverage model from fully insured through Blue Cross to a self-insurance model, in which Blue Cross administers the plan, but the county government pays the claims.
Marx said such a model could save the county significant money, if the Kane board is willing to assume a certain level of risk.
Based on past claims activity, Global estimated the county could pay about $14.9 million in 2014, a savings of $600,000 vs. what the county had negotiated with Blue Cross for full insurance.
Should claims spike, however, the county could pay up to $16.6 million next year, or about $1.1 million more, Global estimated.
But Marx said switching to self-insurance would carry a long-term payoff.
He estimated the county would have saved a total of $1.75 million over the last four years if it had been self-insured.
Additionally, he noted, if the county switches to self insurance, the county would be exempt from a 3 percent to 4.5 percent tax levied on fully insured health plans by the federal government under Obamacare.
Kane County Board Chairman Chris Lauzen said the presentation on switching the county’s health insurance model was more than just idle talk.
He said the County Board will need to decide next month whether it wants to take that step, as the county’s budget will need to be completed in October and approved in early November.
Lauzen invited county residents to contact him to share their thoughts on the matter.