Mehlville Fire Protection District to pay $438,969 less than projected for health insurance
January 19, 2005 - By SCOTT MILLER
Health insurance benefits for Mehlville Fire Protection District employees will re-main unchanged from last year, but the district will pay $438,969 less than projected.
The Board of Directors last week approved a health insurance plan from United Health-Care, the district's current provider, that would boost insurance costs 6.8 percent, or $95,043, to $1.49 million for fiscal 2005.
When six more employees are hired to re-staff a fifth ambulance, the total cost will be $1.56 million, according to figures provided by Chief Ray Haddock.
Still, the district will save $438,969 on health insurance based on the $2 million that originally was budgeted for fiscal 2005, Comptroller Jeff Geisler said. Insur-ance cost $1.39 million last year.
The district provides medical, vision and dental insurance with 100 percent dependent coverage for its employees. Because co-payments and deductibles will remain the same as last year, employees will not have any additional out-of-pocket costs. In-surance costs $11,311 per employee.
The board accepted United HealthCare's proposal over a bid submitted by Blue Cross Blue Shield that was $65,000 less.
The board rejected that plan because, in part, health-care delays could have oc-curred. Blue Cross must pre-approve care before paying, while under United Health-Care's plan, employees can obtain medical attention immediately without the company's approval.
Chairman Tom O'Driscoll made the motion to accept United HealthCare's offer, a recommendation from the firefighters' union. Treasurer Dan Ottoline was absent and Secretary David Gralike — the only other director — reluctantly seconded O'Driscoll's motion.
"Obviously United HealthCare feels very comfortable with our business. I mean competition is what drives down price," Gralike said. "If we're not able to drive down prices with competition (next year), I feel uncomfortable with that."
The district solicited 10 companies for proposals, but only two replied. Gralike feared chasing away Blue Cross's less expensive proposal would deter the company from submitting bids next year.
Paul Wirth, an insurance consultant with J.W. Terrill, said insurance companies have short memories and would be more concerned with districts that annually flip-flop insurance carriers. He also said if the board wanted Blue Cross's plan, it needed to accept it soon to allow time to switch insurance providers before the district's current insurance with United expires in February.
"As from the union's perspective, we would still like to remain with United HealthCare," said Chris Francis, president of Local 1889 of the International Associ-ation of Fire Fighters. "United HealthCare has just been wonderful for all of us."
Gralike said, "I know that everybody's happy with United HealthCare. I second (the motion) and I certainly hope that we're going to have competition next year."
The board also renewed its dental plan with Essex Dental for $120,267, the same amount it paid last year. Essex's original bid was an 8 percent increase to $129,267, but the company dropped the increase in its second quote.
The district could have saved another 1 percent on its health insurance with United, or about $15,610, had it chosen United to provide dental insurance. United's plan cost $10,000 more than Essex, however, meaning slight savings. Plus, the network of dentists was smaller, possibly decreasing services, Haddock said.
On the health insurance, United originally submitted a bid with a 7.9 percent increase in insurance costs, but reduced the cost in its second quote. Blue Cross cut its cost increase by 3 percent in its second proposal, making its bid $65,000 cheaper than United.
But Wirth and board members raised several concerns about Blue Cross. Both companies customized health plans for the Mehlville Fire Protection District.
"United HealthCare will renew its plan as old benefits existed," Wirth said. "They agreed to design a plan to accommodate the same benefits you have now ... so that's a good thing.
"Blue Cross Blue Shield didn't use its canned service," he said. "They customized service for the Mehlville Fire Protection District to equal United HealthCare." But when working with Blue Cross for other districts, Wirth said the company experienced computer glitches that disrupted service in rare occasions because they weren't using their normal "canned" services.
Wirth said he would work to ensure service wasn't disrupted if the board chose Blue Cross, however.
With United HealthCare, the district still will not experience the large spike in insurance costs Geisler predicted and district employees will not pay more out of pocket for their health insurance.
During meetings of the district's Fire District Advisory Committee for Tomor-row's Emergency Services, or FACTS, last summer Geisler projected that insurance costs would jump by 19 percent annually.
After meeting for nearly two months, the committee recommended seeking a 33-cent tax-rate increase, which voters approved in November. With Geisler predicting a much larger cost increase, board members were pleased with the original bid and even happier with the second bid, which will save them $438,969. Wirth said the current economic market is driving down insurance costs.
"For years we've been budgeting for high premiums. It's nice to finally get the benefit of an apparently shifting market,'' O'Dris-coll said.
"It just makes me wonder why with '04 trends United HealthCare would be so reasonable," he said, referring to a spike in Mehlville insurance claims during 2004 that cost United HealthCare money.