MFPD saves nearly $50,000 by decreasing insurance benefits
The Mehlville Fire Protection District Board of Directors recently voted to save nearly $50,000 by decreasing health insurance benefits.
Under the current health insurance plan with United HealthCare, the district paid an annual fee of about $1.3 million for 11 individual employees and 126 families.
With no benefit changes, the district's cost would have increased 12 percent to about $1.46 million. However, Board of Directors Chairman Tom O'Driscoll and Secretary David Gralike voted last week to change the benefits and increase the district's insurance cost by 8.5 percent instead, for a total cost of roughly $1.414 million. Treasurer Dan Ottoline Sr. was absent from the Jan. 20 meeting.
Health insurance benefits will change to a $20 office-visit copayment from a $10 copayment; out-of-network coinsurance will increase to 80 percent from 70 percent; prescription drug card copayments will increase to $7 from $6, to $25 from $20 and to $40 from $35; and the copayment for an emergency room visit copayment will double to $100 from $50.
After weeks of discussing health insurance benefits at board meetings and at meetings between district union employees and administrators, O'Driscoll made the motion to select what had been termed as the "Option 1'' benefit plan.
"I'm going to take a position and I'm not going to dodge the question,'' O'Driscoll said. "Given the information that you've provided tonight in terms of the average increase in cost to the employee, the fact that Option 1 saves us — is where the bulk of the savings is, and that's approximately $50,000, I'm going to make a motion that we go with Option 1, which would result in an 8.5 percent increase rather than a 12 percent increase.''
Consultant Paul Wirth of J.W.Terrill, the district's insurance broker, earlier had provided information that a member insured with United HealthCare, not specific to the Mehlville Fire Protection District, had an average of 3.44 office visits last year.
"I know the contract size for the family unit at Mehlville is 4.6 people. So 4.6 times 3.44 is roughly 15,'' he said. "If you go from a $10 to a $20 office visit that would obviously be a $150 increase to the participant.''
The cost of emergency room visits would increase by $50, he said, so the district's options could increase an employee's costs anywhere from $200 to $400 per year.
At the board's previous meeting Jan. 12, O'Driscoll had noted, "Well, the last few years we've tried and tried to change carriers, we've tried to get the costs down as much as possible, and I don't want to create a serious impact on the employees. But when I look at a copay $10 vs. $20 and a drug card differential of really $1 on generic drugs and $5 on name brand, and a savings of $50,000 by going with Option 1, I'm inclined to go with Option 1. But I'm willing to listen if you have anything else.''
Before Gralike seconded O'Driscoll's motion at the Jan. 20 meeting, he said, "I'll comment that I was really hoping for Option 2 because of a substantial savings of $68,000, but given the fact that there seems to be some of the employees that want to maintain the same benefits, I'm more than willing to go with Option 1.''
The plan labeled Option 2 would have increased the district's cost by 6.8 percent rather 8.5 percent under the plan that was chosen. Option 2's cost to the district would have been less than a $90,000 increase from the current year. Benefits differed between Option 1 and Option 2 only in the prescription drug card.
The board also asked the union and administration to talk to their members and return to the board with some input.
During the Jan. 12 meeting, Local 1889 of the International Association of Fire Fighters President Chris Francis told the board, "We discussed this at our January union meeting, and we are in favor of keeping insurance as is with a 12 percent increase. Over the last year and a half, the union has made concessions to give up a lot of the overtime and save the district money, as well as other areas.
"You know, we didn't take any raise last year, had no monetary negotiations last year, as well as we're not aware that we will possibly get a raise this year, so we'd like to keep the health insurance exactly where it is with a 12 percent increase,'' Francis added.
The administration also said members wanted to keep benefits at the current level, Comptroller Jeff Geisler told the board.
When the matter was discussed further, and both O'Driscoll and Gralike were leaning toward changing benefits to reduce the district's cost, Francis said, "Mr. O'Driscoll, I would just say that as you said a moment ago, the administration and the union has agreed on one thing in — probably the first thing in a long time, and I would not think to speak for the administration, but if you're going to give us the option — have us pick one of those options, then naturally, my option would be for Option 1, but full well knowing that I would prefer to have the regular renewal benefits.''
Francis later requested that the matter be tabled until the Jan. 20 meeting.
When O'Driscoll asked what would happen during that week, Francis said, "The only thing that I was thinking was maybe we could come up with some other means of being able to keep the insurance where it is, maybe come up with that savings in other spots. I don't know.''
At the Jan. 20 meeting, Francis said the union's stance had not changed.
"After polling all three shifts and the union employees in the administration, it was nearly unanimous that they wanted to stay with the current benefits,'' he said.
Chief Ray Haddock spoke for the administration, however, saying that he discussed the two options, other than the current plan, with administrators, "and talking to each individual, as they looked at the difference, they said it didn't matter to them, it wouldn't have that much effect on the individual because they looked at the prescription drug at $5 more. The staff had no problem with either of them.''