Daviess County Fiscal Court approved a new health insurance provider for County employees Thursday night, Starting Jan. 1, County employees will receive health insurance through the Kentucky Department of Employee Insurance’s Kentucky Employees’ Health Plan (KEHP).
While employees could possibly pay more for their insurance through this new plan, County officials stated that the prices would not increase by much, and that the switch in providers would save Fiscal Court up to $2.5 million.
County Treasurer James Hendrix and Judge-Executive Al Mattingly traveled to Frankfort on Sept. 21 after receiving a letter of renewal from their previous provider on Sept. 11. Hendrix called the renewal proposal “horrible,” stating that it was much higher than it’d been the year before.
Most employees associated with Fiscal Court were informed of the changes during a series of five different meetings that took place before Thursday’s Fiscal Court meeting. Daviess County Sheriff’s Office employees will meet Friday to discuss their agency’s specific insurance changes, according to Chief Deputy Major Barry Smith.
Hendrix said the payout for individuals and families on the new plan would change, but not as drastically as some employees have speculated. Four different plans will be available for employees to choose from. Those who are actively employed, retirees and the DCSO will all be under the same insurance provider, but separated into different pools with different price points and regulations.
“We kept thinking the trend would turn around,” Hendrix said of the increasing costs in health benefits. “For the fifth consecutive year, it continued to get worse. It was unaffordable and unacceptable. Fortunately, because of the people we’re dealing with, they didn’t just bring us the bad news and dump it on us — they brought us a viable alternative.”
Hendrix said County leaders have been talking about the possibility of adopting the KEHP plan for a few years now.
According to the Commonwealth of Kentucky’s website, the KEHP is a self-funded plan that offers health insurance and flexible spending accounts to nearly 265,000 members.
Hendrix said the current insurance plan had been tweaked over the last few years, but Fiscal Court kept “punting” the issue of rising costs until, finally, they hit the wall.
“Because we are in the state pension plan and CERS, we have [access] to this insurance plan,” he said. “It’s an Anthem network just like the one we have, so all the same doctors will be in the network. It’s going to be at a greatly reduced price because you’re spreading the risk over 268,000 employees.”
Due to time constraints, Hendrix and Mattingly had only 10 days to assess the information they’d received and meet with state leaders to discuss and approve the new plan. Hendrix said Fiscal Court was lucky to be presented with a new, feasible plan in the short timeframe they were given to make a decision.
According to a Fiscal Court budget from the 2017-2018 fiscal year, $4.2 million was spent on employee and unemployment health insurance. Hendrix said this new plan could save Fiscal Court a minimum $1.5 million but, more than likely, around $2.5 million, based on claims.
Fiscal Court will be required to commit to KEHP for three years, wherein the agency cannot exit the contract during that time. The only component of the County’s current plan that will be retained is the dental plan because it, as Hendrix mentioned, was far superior to the KEHP dental plan.
“Everyone, independently, came to the same conclusion, that we should migrate our plan to the KEHP plan,” Hendrix said. “We went up to Frankfort to sign this document [prior] to Court approval [because of time constraints].”
Editor’s note: This story has been changed from the original posting. Peel and Holland are an insurance advising company that helped Daviess County Fiscal Court select their new insurance provider and plans.