City Stop-Loss Insurance Costs Expected To Increase

City officials are figuratively at the roulette table when it comes to selecting stop-loss insurance coverage.

However, instead of betting on black or red, city officials will be hedging their bets by comparing premium costs against risk.

On Monday, Joseph Bellitto, city comptroller, discussed the stop-loss insurance coverage for the city’s self-insured health care plan, which will increase significantly. He said the plan runs from June 1 to May 31 each year. He added city officials are looking at an increase between $98,000 to $135,000 depending on how many in the insurance plan exceed the deductible.

Bellitto said he has narrowed the focus for council members to two options — proposal No. 4 and No. 5 — from the nine stop-loss insurance coverage plans he reviewed that Premier Insurance Agency was able to broker for the city. Proposal No. 4 has an increase premium costs of $135,334, with a deductible of $175,000 per a participant. With this stop-loss insurance coverage proposal, the city would be responsible for the first $175,000 in claims, with any amount greater being covered by the insurance company, which is HighMark Blue Cross Blue Shield.

Proposal No. 5 has a premium increase of $73,117, but the deductible would be $200,000. Bellitto said it is a guarantee at least one participant in the plan will exceed the deductible of $175,000, which would increase the cost of proposal No. 5 by an additional $25,000 to be at least $98,117.

“At this point, we would have a little wiggle room so if we had another participate go over (the $175,000 deductible from proposal No. 4) then we are at $123,117, which is still less than proposal No. 4’s ($135,334 premium). But if another individual goes over (the deductible), then that would make proposal No. 5 more expensive than proposal No. 4. Also, a year from now we would be looking at a higher threshold to start with for our deductible,” Bellitto said. “This is legalized gambling. Trying to make the best decision. Trying to compare premium against risk. Right now, the city’s risk is at $175,000 for each participant in the plan. It has been at $175,000 for some time.

“We’ve taken on more risk to keep the premium down. They gave us a lot of options to choose from. We’re trying to pick the one with the lowest premium and the least amount of risk.”

Bellitto said during the past four years the city has paid more than $1 million for stop-loss insurance. However, the insurance company has paid more than $2 million, which has saved the city more than $1 million.

Council is scheduled to further discuss which stop-loss insurance proposal they will select during their work session meeting at 7 p.m. Monday, which is prior to their voting session meeting at 7:30 p.m.