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Kane board poised to OK switch to self-insured health plan in 2014

GENEVA – Kane County’s government next year likely will change the way it provides health insurance benefits to its more than 1,200 employees and their families.

Wednesday, the Kane County Board’s Finance Committee unanimously recommended the county switch its coverage model from fully insured through Blue Cross Blue Shield to a self-insurance model.

Under that proposal, the county still would rely on Blue Cross to administer the plan, but the county itself would pay the claims.

“We will be taking on ourselves a calculated risk,” said County Board member John Hoscheit, R-St. Charles, chairman of the Finance Committee. “But I think it makes sense to do this.” 

The committee vote comes about a month since the county’s employee benefits consultant, Global Benefits Group, advised the County Board strongly to consider making such a change.

Global said at that time, if claims activity remained similar to what the county experienced in years past, the county could expect to pay about $14.9 million, or $600,000 less in 2014 than what the county had negotiated with Blue Cross for full insurance.

Should claims spike, however, the county could pay up to $1.1 million more than what the county had negotiated with Blue Cross, Global said.

But no matter what happens next year, Global said the decision likely would pay off in the long term, potentially saving the county millions of dollars.

They noted if the county had switched to the self-insurance model four years ago, it could have saved $1.75 million over that span.

Additionally, if the county switches to self-insurance, it would exempt itself from a 3 percent to 4.5 percent tax levied by the federal government on fully insured health plans under the Affordable Care Act, commonly known as Obamacare.

On Wednesday, Sheila McCraven, the county’s executive director of human resources, said the county cannot yet estimate how much it will pay in 2014 in health insurance contributions, because those amounts are still being negotiated with the county’s employee unions.

McCraven said the County Board should have those numbers in November. 

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