BRIGHTON — The city of Brighton is looking to self-fund medical insurance for its employees next year. City Council heard the proposal from its insurance consultants HUB International and Human Resources Director Karen Borkowski during its Oct. 8 study session.
As costs in health care continue to increase annually, City Manager Manuel Esquibel said the city is considering self insuring as an alternative to full-funded insurance. The move could save the city more than $20,000 in its first year.
Underwriter Nathan Wolfe said the city’s United Healthcare plan costs are expected to increase by 10.3 percent next year. By switching to a self-insuring plan the city would pay an estimated $3.04 million instead of $3.06 million.
“When you’re fully insured, you pay the premiums and the care is paid for and you don’t really see the engine working,” Wolfe said. “Really, with a self-funded plan, we’re kind of taking the hood off and we’re taking a look at the components of the engine now.”
Wolfe explained that being self-funded does have its risks.
“There is a little bit of a risk in going self-funded, in that if your claims run higher than expected, you do pay more for the claims that year,” he said.
Terry Reams, of HUB International, added that although the city would pay more if the claims were higher, it would also pay less if employee claims were less.
Wolfe said if the plan runs well, additional funds would be freed up to either keep employee contributions static or, if the plan runs really well, lower the employee costs of the plan.
The cost of the self-funded medical insurance has been built into the city’s budget for 2014, and the city has set aside $425,000 in reserves for the switch.
In other business:
• Council recommended the city not implement resident growth pacing for next year.
• Council gave Clerk Natalie Hoel approval to schedule a special study session for 6 p.m. Nov. 7 in the event of a run-off election.