By JOEL PHELPS | arkadelphian.com
Clark County justices of the peace on Friday gave the OK to try out a self-funded health insurance program for its 100 or so employees.
In a special called meeting that lasted a little over an hour, the Little Rock-based Hatcher Agency fielded questions from the county’s top elected officials and nearly every justice of the peace regarding the switch.
Friday’s decision comes on the heels of an expected $120,000 spike — a 16% increase — in annual premium costs, set to take effect within the next year. Even with the change to a self-insured program, there will be an estimated 7.5% cost increase in the first year. It was noted at the meeting that savings may not be evident during the first year.
Employers with self-insured employee health programs pay for medical claims and fees out of current revenue — in effect, acting as their own insurers. It’s the alternative to a fully insured plan, where employers pay a fixed premium to a third-party commercial insurance carrier that covers the medical claims.
Costs for insuring county employees comes from general fund revenues.
“We can’t continue going down this road,” Tucker said of rising insurance costs, adding later that he had questioned his counterparts in three other Arkansas counties who praised the savings associated with a self-insured program. Pope County (Mena), for instance, reported a savings of $1 million over the course of four years by switching to a self-insured program, Tucker said.
The county will keep its current provider, United Healthcare, but the Hatcher Agency says it will manage claims and costs “on the back end.” For the past three years the Hatcher Agency has acted as a broker in managing Clark County’s health insurance.
Friday’s meeting was intended to gather information. At the conclusion of Hatcher’s presentation District 7 Justice Jenna Scott, a Joan Republican, motioned to try out a self-insured program for one year. Scott’s motion got a second from District 5 Justice Jimmy King, an Arkadelphia Republican.
Scott, whose career background includes insurance and employee benefits, later told arkadelphian.com that the decision will cut profits from other insurance parties. “While this plan does have some risk, it cuts out some of the profit from other parties,” she said. “Having some funds from COVID that we can use as a safety net is a big benefit to the county.”
Judge Tucker noted that Ouachita Baptist University has a self-funded health insurance program.
Prior to Henderson State University’s merge with the Arkansas State University System, Arkadelphia’s four-year public college had tried self-funded insurance for a couple of years, a decision that many of Henderson’s employees — and some former board trustees — regarded as a mistake because of minimal coverage and poor prescription plans. Henderson, Scott contends, “had much bigger problems than just mismanagement of insurance.”
King later said he believes the decision will be a money-saving one “for the simple fact that we will be able to save some of the money that we are [now] paying every month that the insurance company keeps. The county will be able to save that money by being self-insured. We’re hanging onto the money if we don’t need [the insurance].”