During the the policy discussion portion of its meeting Tuesday afternoon, the Little Rock Board of Directors resumed discussion about the 2020 budget. Mayor Frank Scott Jr., who said in September that he hopes to adopt next year’s budget by the end of November, reminded city directors that they will need to approve a new insurance plan for city employees, which he called “our most precious assets,” for the 2020 year. Because enrollment begins in late October, Scott said he will propose a new insurance plan next Tuesday for approval by the board.
Tuesday’s discussion was an update on the efforts of Scott, City Manager Bruce Moore, City Finance Director Sara Lenehan and Human Resources Director Stacey Witherell to decide which employee health care plan the city will proceed with in 2020.
Directors were told during a Sept. 24 budget discussion that the city has two options for employee health care next year: It can either remain under a “fully insured” plan with United Health Care Group and experience a 15 percent increase in insurance premiums — about a $2 million increase — or it can move to a “self-funded” plan through a clinically integrated health network, also known as a CIN, that would cost “about the same” as the fully funded plan, but would allow the city to more directly manage its employees care.
On Tuesday, Tom Kane, executive vice president of Stephens Insurance and manager of the city’s health insurance plan with United, told city leaders that within those two larger options are four potential cost shares between the city and its employees for their health insurance plans, details of which will be provided in a handout to be emailed to them tomorrow, as it was not available Tuesday afternoon.
In addition to choosing between the fully-funded model and the self-funded CIN, the city will also have to decide how it will handle the 15 percent cost increase for employee insurance, regardless of which model it chooses, as Kane said the “minimum cost” of the CIN plan would end up being “about the same” as the fully-funded model after the $2 million increase.
The city has three options for dealing with this cost increase: It can continue to provide “base coverage” for employees at no cost to them, which is how the city currently operates; or the $2 million increase in insurance premiums would be “passed on” to employees through “additional premium contributions,” meaning health insurance would begin to cost employees “something,” according to Kane; or the cost of that 15 percent increase will be split between the city and its employees.
Kane added that if the city chooses the self-funded CIN model and experiences a “very bad year,” the maximum cost for the city and employees would be roughly $19 million.
“That’s a risk,” Scott acknowledged, while adding that under the fully-funded plan, the city would still face the “risk” of steadily increasing insurance premiums.
In September, at-large director Dean Kumpuris, who is a gastroenterologist at CHI St. Vincent, spoke in favor of the switch to a CIN, and he repeated his sentiments on Tuesday.
“I’m tired of doing [the fully funded model] because I don’t think we’re helping people. We’re not taking the opportunity to make anybody have the opportunity to get better. … And there’s a risk. There’s a risk in anything you do, but it’s a sure thing that a year from now, we’ll be sitting here … in the same boat again.”
Though neither Kumpuris nor any of the city directors will be involved in the decision about which health insurance model Scott’s “executive administration” proposes to the board, Kumpuris said that if he were “in the room,” he would “not be voting for something that is a self-perpetuating failure.”
At-large director Gene Fortson and Ward 5 director Lance Hines both agreed that the move towards the CIN is in line with how other large companies have begun handling employee healthcare.
Scott said that the city must make a choice before health insurance enrollment for employees begins in October, so he will propose his decision to the board by Friday for a vote at next week’s meeting.
The board also slated an ordinance for next week’s agenda that would amend the city’s noise ordinance to allow music to be played at the amphitheater in the River Market until midnight, instead of the current 10:30 p.m. limit.
Directors will vote on the ordinance at next week’s meeting, which starts at 6 p.m.