by Jason Ogden

TAWAS CITY – Iosco County Treasurer/Administrator Elite Shellenbarger and Clerk Nancy Huebel outlined a breakdown of the potential cost to county employees for health care benefits as the county tries to balance a nearly $500,000 budget shortfall.

The breakdown was given to the Iosco County Board of Commissioner’s Committee of the Whole during a Sept. 18 meeting. Healthcare costs have been highlighted by both officials as a big expense in the county. Shellenbarger said the county, in order to make up the budget, would have to take funding from the county’s rainy day fund, but cautioned commissioners on doing that, as it would quickly deplete the fund in several years.

Previous, Shellenbarger floated the idea of employees switching to a plan where they pay part of the “cap” or capitulation rate that is required to the state to keep county employees on Blue Cross Blue Shield of Michigan medical insurance.

Currently under the county’s healthcare plan for employees, the employees do not pay for a portion of the healthcare capitation. Employees do, however, pay copays for certain medical procedures, prescriptions and have a deductible for individuals and families.

During an August meeting Shellenbarger discussed the idea of the county switching to an 80/20 option, where employees would pay for part of the insurance capitulation to have health benefits. The idea of shopping around for a different plan was explored as well.

Shellenbarger provided hard numbers for commissioners during the Sept. 18 meeting, showing numbers that employees could potentially help balance the budget, but keep employees from having to pay into the 80/20 option, but still contribute to their health insurance.

Huebel said under the Michigan State Public Act 152 of 2011, public caps for government employees are set no higher than 80/20 to give employees, and the area governments, a break on the cost. She said the cost of the cap itself is determined with a formula based on the consumer price index. In previous years the county has had to pay a cap of around $1.2 million, but that changed this year with a state cap rate of $1.487 million, Shellenbarger said.

He said that combined with the 2019 renewal increase for insurance, has the county paying around $500,000 more in this year’s upcoming budget for employee medical insurance.

“The solution to keep the same coverage that we have – and if we accept the state cap – that would mean that each employee would pay what we are over the state cap,” he said.

Under the county’s plan, if employees paid the difference, single payers on the insurance would have to pay $149.89 annually for their medical insurance, or $5.77 per check for each of their 26 pay periods. There are 27 individuals who are single payers on the county’s insurance.

For two-person payers, under the plan, they would have to pay $2,464.75 annually, or $94.80 per pay period. There are 34 individuals on this plan.

For family subscribers (more than three people on a plan) they would have to pay $2,309.44 annually, or $88.82 per pay period. There are 44 individuals who would fall under this plan under the county’s insurance.

This would be a big change for the employees, said Huebel, who said that in her decades with the county, employees never had to pay insurance premiums. Although the costs would be new, according to Shellenbarger’s breakdown, the costs are not as significant as if the county went with an 80/20 plan.

If the county elected to go with the 80/20 plan single payer employees would have to pay $1,393.75 annually, or $53.61 per pay period. For two-person coverage under the plan, a cost of $3,345.02 is due annually or $128.65 per pay period. Under the plan for family coverage, the cost is $$4,181.28, or $160.82 per pay period.

Shellenbarger said although commissioners would decide, it was his opinion that they should go with the state cap plan. He said that in a year the county could again be under the cap cost and employees wouldn’t have to pay for the following year.

“The only other avenue we could approach, is to go with a different drug card, and that’s a possibility,” he said. “We have changed the copays and deductible in the past. But it’s cheaper to pay and keep the coverage you have, than to go back and expand the copays and deductibles, which will cost you a hell of a lot more in the long run; just using logic.” 

Vice Chairman Donald O’Farrell said he thought the plan would be a good deal for employees.

“I give you all the credit in the world,” he said to Shellenbarger. “You are not going to do any better than this. And if you think they are going to work a miracle on a drug card they are not.”

Huebel said that the county is getting other insurance quotes from different providers, and the rates are from Mark Elliot of Tawas Bay Insurance for Blue Cross Blue Shield of Michigan medical insurance. She was doubtful, however, that the insurance rates would be less expensive with other providers.

Commissioners have not made a decision what to do about the budget or insurance and Shellenbarger said he wanted the public, employees and county officials to know that they did their “homework” on the issue.

Before Shellenbarger outlined the numbers, Brian Fisher, a representative from the United Steel Workers voiced his concern about the potential change. Fisher represents courthouse, Iosco County EMS and 81st District and 23rd Circuit Court employees. He said the change to an 80/20 plan would severely shortfall employees’ paychecks, if they were on the family plan.

“This is very concerning to my members and to myself,” he said. “Doing some of the math if you’re an employee of the county who takes family insurance, if we went tomorrow from the cap amounts to the 80/20, that would be a pay cut in the neighborhood of $2 an hour for someone taking the family insurance,” he said. “A lot of my members live paycheck to paycheck; they cannot afford a $2 hour pay cut.”

Fisher said that if this were to take place the county and union would have to do a mid-effect negotiation because it would be a dramatic effect on union members. He also said that members bargained in good faith with the county because the insurance plan was always a good one for employees.

“I’ve been involved in multiple bargainings with these units and every time we have to come up with contract bargaining the county expresses in light of the raises we need to take into consideration the health care benefits that are provided to the county, and those health care benefits are robust in compared to other employers and so we have taken less smaller percentage in raises in recognition of that over the years,” he said.

Fisher urged the county take a collaborative view of how to address any shortfall in the budget because of the potential effect it would have on employees.

O’Farrell said he would take Fisher’s comments into consideration in the future.