City pays for insurance cost hike

Published 11:59 pm Tuesday, September 8, 2009

Members of the Andalusia City Council and the Utilities Board of Andalusia agreed in a joint meeting Tuesday afternoon to share the burden of increasing health insurance premiums, rather than passing along increases to employees.

Both groups agreed to pay all of the increase in single coverage and half of the increase in family coverage, an approximate combined total increase of $100,000.

Both groups of employees are covered through the state’s Local Government Health Insurance Program (LGHIP). Mayor Earl Johnson said health insurance premiums for city employees have increased 45 percent over the past five years.

The city’s director of human resources, Deborah Spivey, said if the city opts out of LGHIP, it can’t be readmitted for three years, and it will be liable for any outstanding claims.

The current contract with LGHIP states that if the city opts out of LGHIP, it won’t purchase insurance from an LGHIP provider for at least two years.

That complicates possible decisions, she said, because until January of 2008, LGHIP providers were Blue Cross and United Healthcare. Since that time, the only provider has been Blue Cross.

Beginning in January of 2010, she said, the city could purchase health care from United Healthcare. However, if it opts out of LGHIP, it can’t purchase insurance from Blue Cross for at least two years.

Johnson said it is too late for to make any changes in the current budget year, but recommended that a committee begin looking at possible options for next year.

“It’s not just the financial impact of this increase,” he said. “If we don’t get proactive, we’ll get to the point we can’t do anything but buy insurance for our employees.”