An Oktibbeha County supervisor suggested publicly on Monday the county may be breaking the law in the way employees pay for health care coverage for dependents.
However, county records and correspondence with the State Auditor’s Office indicate no wrongdoing.
Oktibbeha County is self-insured, with BlueCross BlueShield serving as a third-party administrator for its coverage. By law, it can cover the costs of employee insurance premiums. However, employees are responsible for all the premium costs for their dependents.
District 4 Supervisor Bricklee Miller, during the board’s regular meeting Monday morning, questioned whether the county is using the correct “formula” to make sure taxpayers aren’t footing the bill for dependent premiums — indicating those employees should be paying more for that coverage.
She repeatedly referred to a different “formula” the county should be using to determine premiums for dependent coverage, citing a recent presentation to the board by Cigna firm representative Les Smith who was trying to sell services to the county.
“What I’m challenging is the formula,” Miller said. “I’m saying we need to investigate the formula that is supposed to be an adequate amount.”
Other supervisors, as well as County Attorney Rob Roberson, questioned what formula Miller thought the county should be using, but she did not provide them with one.
“I’ll bring it to you before the next meeting,” Miller said. “I’ll get (Smith) to email it.”
Miller sent a formula via text message to a Dispatch reporter late Monday night. She at first said she found it “on Google” and later said it appeared on the “Bureau of Labor” website. How the formula relates to the county’s insurance coverage is unclear and The Dispatch has been unable to verify on what website it appears.
Records: Employees are sufficiently covering costs
According to documents County Administrator Emily Garrard provided The Dispatch, the county deducts the monthly cost of employees’ dependent insurance premiums from their pay.
That cost is $525 for family coverage, $315 for children only or $300 for spouse only coverage.
The documentation also shows for the most recent insurance period, from Dec. 1, 2017 through Nov. 30 of this year, the county collected $171,945 in premiums for dependent coverage for its employees. During the same period, the county received $109,823.92 in claims for those dependents.
Roberson, speaking with media after Monday’s meeting, said he’s not aware of any state statute that dictates a formula by which the county has to set the premiums for its insurance coverage. He said the county sets the premiums at a level that covers the costs while still seeking to provide the most affordable insurance possible to employees.
As a hypothetical example, he said, if dependent insurance costs $10, the county tries to set the premium to at least $11. Whether there’s a legal requirement through a formula to set it higher is unclear. He said he will look into the matter and report back to supervisors with his findings.
“It’s a relevant question, but the meat of it is to make certain that we’re keeping the county protected in terms of what we’re charging,” Roberson said. “… I don’t know the answer to that, but at the moment, my knee-jerk is there’s not a formula that I’m aware of through state law.”
Logan Reeves, a spokesperson for the State Auditor’s Office, said the office cannot confirm if it has received any complaints about or initiated an investigation into Oktibbeha County’s insurance policy. However, he said the office’s primary concern is to ensure that employees pay the full premium for their dependents.
“For any beneficiary, the employee has got to pay the entirety of the premium,” he said.
Garrard confirmed the employee deductions the county presently charges fully cover the costs for dependent coverage.
Cigna competing for county’s business
Supervisors, on a recommendation from Garrard, opted to remain with BCBS as its third-party administrator for this year’s insurance term. However, Smith with Cigna presented to the board earlier this month, contending he could provide lower administrative costs to the county.
Miller said the administrative fees for Cigna were cited at $583,740, compared to the $619,135 BCBS charges.
At Monday’s meeting, supervisors were reluctant to change insurance companies in the middle of the term but voted to reopen the matter in the spring, to give sufficient time to consider a possible change before the next insurance term.
Smith told The Dispatch the issue with the county’s dependent premiums came to whether they could meet the aggregate point — the total amount of liability the county would have to meet if all of the dependents and employees maxed out their insurance claims in the same year.
If that happens, he said, the county could be on the hook for up to $75,000 in health insurance costs for every insured person. With 180 employees and dependents, that cost could soar well over $15 million, he said. In that case, the county would be responsible for paying the cost.
He said the county could add aggregate reinsurance to its policy, which would minimize its exposure in a catastrophic scenario.
“If they know that’s their maximum, then at that point, they have a decision to make,” Smith said. “Do we fund to that exposure, so we know we’re fiscally making a good decision for this county? If they fund, how do they do that? They have to charge that in premiums for dependent care.”
Trainer said the county would have to weigh raising insurance premiums against the likelihood of any major hits to its insurance. He said the county, so far, has not experienced such a situation.
“We were informed that we weren’t charging our employees enough,” Trainer said. “That right there would be a point of contention. You’d have to explain that to some unhappy employees once they got that notice. And we haven’t had any catastrophic losses that would put us in jeopardy.”
Alex Holloway was formerly a reporter with The Dispatch.
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