Elon’s municipal leaders have decided to wade into a local government insurance pool that has proven increasingly popular with public-sector employers eager to reduce the cost of employee health coverage.
Elon’s town council formally voted to join the North Carolina Health Insurance Pool (NCHIP) on Tuesday based on a cost-benefit analysis from town manager Richard Roedner.
Roedner reminded the council that Elon currently purchases employee health insurance from Blue Cross and Blue Shield of North Carolina, which charges the town $574,073 a year for this coverage. The town manager added that Blue Cross recently informed him that it will raise the town’s premiums by 15 percent in the next fiscal year – a prospect that he confessed has become all too familiar during his tenure.
“We have always bought on the open market,” he explained, “and since I’ve been here, we’ve had proposed rate increases from 15 to 34 percent. We’ve usually been able to negotiate them down or change insurance vendors – and in my time here, we’ve had three different companies.”
Roedner acknowledged that the relatively small size of Elon’s 68-person full-time staff has left the town vulnerable to the sort of pricey medical claims that tend to trigger premium increases. He pointed out that, by joining NCHIP, the town will be able to combine its resources with 29 other local governments in order to weather this eventuality.
“When we have a bad year on health claims,” he added, “our rates go through the roof. But the pool has 16,000 members, and their rates are much more stable.”
Roedner observed that, in the past, Elon has been barred from throwing its lot in with NCHIP due to the insurance pool’s 100-employee threshold for membership. He noted, however, that the pool recently lowered this requirement to 50 employees, which has opened the door to Elon’s admittance.
As another chit in NCHIP’s favor, Roedner informed the council that the pool contracts with Blue Cross to administer medical claims and provide a network of healthcare providers. The town manager added that the pool’s reliance on the town’s current insurance provider will provide the town’s staff with some continuity in their medical care. He conceded that Blue Cross’ role in this operation will essentially force the town to accept the company’s proposed 15-percent premium increase – although he emphasized that, under the insurance pool’s rules, any future hikes will be capped at 6 percent per annum.
In the end, Roedner’s pitch for NCHIP convinced the council’s members to dip a figurative toe into this local government insurance pool.
“I don’t see any negative for us,” councilman Randy Orwig declared before that evening’s 5-to-0 vote. “This is great.”
