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Richland's employee insurance rates likely to increase, consultant says

RICHLAND, Mo. (Dec. 22, 2010) — Insurance consultants aren’t always bringers of the best news, and John Parrish told Richland City Council members at their Tuesday night meeting that their city needs to expect an increase in their employee health insurance coverage.

“There’s a policeman in here so I won’t get shot,” John Parrish told the council.

“Depends on how bad the news is,” responded Police Chief Mike Hurney.

Parrish said the news wouldn’t be too bad. The city’s current insurance is with Murphy Medical Plan, which is proposing a renewal rate increase per employee of $27.62 per month, which would increase the charge to $400.78 per month per employee.

“I will tell you that this is one of the lesser increases, believe it or not,” Parrish said.

Other quotes were obtained from Blue Cross and from Assurant, but Parrish didn’t recommend them.

“Those naturally came in cheaper, but there was no underwriting,” Parrish said. “(City Clerk Anita Ivey) didn’t think there would be time to get applications back, and the last time that we got a base quote like that… the price was like 47 percent higher than the base rate so I don’t think that was a good alternative.”

One possible alternative, he said, is Coventry Health Plan.

“I have no idea whether it will be cheaper or not but in my opinion it is worth a shot,” Parrish said. “Historically in Missouri they have been in the Cox Network. They’ve bought Mercy out and effective Jan. 1, they will now be in an exclusive St. John’s primary network. We asked and found out today we can get a quote. It will be fully underwritten and we are expecting it Thursday at the latest.”

Alderman Lucy Henson asked if spouses and children are insured; Parrish said one of the 15 employees covered by the city insurance plan pays to have his family on the plan but the city doesn’t pick up that cost, which is $673.30 for the family plan paid by that employee. For the other employees, the city pays most of the cost with the employee paying 3 percent, Parrish said

That number of 15 covered employees could change if one new policeman joins the plan, Hurney said.

“You’ve got one that you’re adding?” asked Mayor Bob Wall.

“He’s asked, but he got told to wait until the plans change,” Hurney said.

Wall asked for a motion allowing Parrish to put the city into either of the two plans based on lesser charges for the same benefits.

“We’d probably have a hard time getting a quorum for the rest of the month,” Wall said.

The aldermen unanimously adopted Wall’s recommendation.

In other compensation-related matters, alderman approved a recommendation by City Clerk Ethel Rowden to purchase a software add-on to allow direct deposit of paychecks. Rowden said that would cost $200 to $300 to do direct deposit and paper checks via payroll software.

“So it will cost us the same whether we pay them by paycheck or direct deposit?” Wall asked.

That’s correct, Rowden said; the one-time cost of up to $300 will allow the city to issue either paper checks or make direct deposits into employee accounts.

“It’s not going to be two systems; we just have to run it twice. The first time it will kick out all the direct deposit people and their stub, and then on the very last page it will print something we will have to send to the bank. The second time we run it, it will print out a regular paycheck,” Rowden said.

“Why are we giving them the option of a paper check?” asked Alderman Tom Murphy.

“Because there are old-timers who want to get a paper check and go to the bank every two weeks,” replied Alderman Jason Lobland.

Responding to questions, Rowden said a survey has been taken of the city’s employees and only three or four still want a paper check.

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