The City of Missoula may levy up to $300,000 in additional revenue to help shore up its Health Plan due to several large claims filed by a small number of city employees that have pushed the plan over budget.
The city has the authority to level a Special Levy in addition to the All Purpose Levy to cover the cost of the employee health insurance plan, officials said this week.
“The city will increase contributions to these percentages, and pass the same percentage increase on to the spouse or domestic partner and dependent coverage,” said consultant Angela Simonson. “That will allow the employee-only coverage to remain at $0 out of pocket for the employee.”
A review of the city’s Health Plan included a look at claims filed in the last year. The results prompted consultants to suggest the city increase its contributions to the plan to ensure it remains fiscally sound.
Consultants recommended a 5.2% increase for the six month plan and a 7.4% for the calendar year. The plan’s total insurance claims so far this year amount to roughly $9.8 million. The plan was budgeted for around $7.7 million.
Even after adjustments, that plan is running about $1.7 million over the prior year according to Leigh Griffing, the city’s finance director.
“We have 31% increase in total claims paid and a 25% increase in total claims costs, including some of the reimbursements,” said Griffing. “One of the big drivers we’ve been contending with now is large claims. We have a handful of those that are ongoing. It’s 102% higher than it was in prior years. Those are the type of claims we don’t have a crystal ball for. It’s furthering the recommendation for these premium increases.”
Asked why the claims are up, officials suggested that during the pandemic, hospitals were not providing elective services. Employees held off on getting certain types of care, though that has changed as restrictions around the pandemic have eased.
“Last year, we had a good year in the plan. People did not have as much claims because of the pandemic,” said city CAO Dale Bickell. “But we’re seeing some of that this year, that people are going back to the medical providers, and that’s part of the increase. But the really driving force is our large claims. Our plan isn’t different than other health plans in that 80% of our costs are driven by 20% of the population in the plan. We have more large claim cases.”
Given the city’s authority to levy revenue to cover costs of the employee health insurance plan, it’s proposing to add around $300,000 to the levy. Still, according to a recent budget presentation, the number of mills levied will decrease from around 44.3 to 42.3.
Members of the city council said the recommendations presented by consultants are sound.
“It’s critically important to keep us in a good place financially with the plan on an ever-constant basis and not get behind the eight ball,” said council member Bryan von Lossberg.