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Ashland ends health self-insurance program Saturday Apr 21, 2018 at 2:01 AM By Tran NguyenAshland Daily Tidings The Ashland City Council ended its health self-insurance program Monday, with councilors saying they “don’t have a choice.” “We are in a hole,” Councilor Dennis Slattery said. “We need to stop digging deeper.” Ashland faced a projected deficit of $1.4 million in health care costs in the next fiscal year if it continued its self-insurance program started in 2013. City officials saw the program as a cost-saving mechanism, but the program has been running a deficit every year, current city Finance Director Mark Welch said. The city put up an interfund loan of roughly $525,000 from its reserves to the insurance account to cover the ongoing deficit, which also left the city with virtually no reserve to cover unexpected incurred claims. The new plan, presented by staff Monday night, is to rejoin City County Insurance Services (CIS) — a self-insurance trust program with a much larger pool of enrolled employees it left due to the lack of claims data. CIS will provide 800 enrollees, including city employees and their dependents, with the current level of benefits for 18 months with lower premiums and a quarterly claims report, staff said. By switching to CIS, the city will save roughly $1 million, which it can use to pay existing claims and start building a reserve, Welch said. “But after 18 months, there are potential benefits changes,” Welch said, citing a potential increase of between 10 and 20 percent in deductibles and insurance copays along with fewer benefits. Councilor RIch Rosenthal, who voted in 2013 to approved the self-insurance program, asked staff if the council has other options. “I’m hesitant to have only two choices,” he said. A representative from JL Jones, the city’s health consultant, said many options were considered, including an attempt to immediately lower benefits which would still result in an increase of 15 percent above the approved budget of $5.7 million. Human Resources Director Tina Gray said lowering offerings immediately would potentially “uproot many employees and their dependents” who are facing significant medical expenses. The city intends to use the 18-month transition period to “communicate with employees about the new health care plans,” Welch said. More than half of city staff and their dependents are under labor contracts, whose insurance premium allocation is split at 95 percent city contribution and 5 percent employee contribution. According to its website, CIS Oregon has more than 250 cities and counties as members. Ashland has had its property and liability insurance with CIS Oregon for years. The city will pay CIS $5.2 million annually until December 2019. The new health care plan kicks in July 1. Councilor Mike Morris, another councilor who in 2013 voted “yes” on moving to the self-insurance program, joined other councilors in authorizing the switch. “We have no other option,” he said. —Reach reporter Tran Nguyen at 541-776-4485 or [email protected]. Follow her on twitter @nguyenntrann.