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Town Council Could Save $50k Over Year with New Insurance
September 19, 2007 - In a move that could save the town more than $50,000 over the next year, the Knightstown Town Council agreed Monday evening to drop its current health insurance policy for town employees in favor of a new one with another company.
While the council took no formal vote on the switch during a special meeting held Monday to deal with this issue, all five members said their consensus was to drop Anthem, effective October 1, in favor of United Health Care. The council also agreed by consensus to keep Don Jones of Greenwood as the town's agent for employee health insurance coverage, a position he's held for several years.
Judy Haines, the town's clerk-treasurer, told the council that with Anthem premiums set to rise 16 percent, the switch to United could save the town $57,612 over 12 months. According to Haines, the monthly premium under the United policy is expected to be about $19,785. The monthly premium for Anthem, she said, would be $24,586.
A local insurance agent, Mike Flowers of Leakey Insurance, was also vying for the town's account. However, Haines told the council Monday night that Flowers contacted her earlier that day and told her he still needed two or three more days to put a bid together for United. If the council waited for Flowers' bid, she said she thought it would be too late for the insurance change to take effect October 1, when Anthem's increased rates begin.
"I don't feel the town can afford to wait," said Haines. However, she added that Jones and Flowers had both told her that United's rates for the town would be the same regardless of who the agent is. "It might just boil down to who you want to deal with - Don Jones, who we have dealt with, or Mike Flowers, who we have not."
Linda Glenn, the town's utility bookkeeper and assistant office manager, spoke in favor of keeping Jones. "He's worked very good for the employees when we've had problem." She also said Jones was easy to contact and quick to respond to employee concerns.
Under the new policy with United, which Haines described as "not as good as (Anthem), but almost," the 26 town employees who are covered will still have a $1,000 deductible, like they did with Anthem. While there will be small increases in their co-pays and the cost of some medication, town employees will still only have to pay $3.25 or $6.25 toward their insurance premium every two weeks, depending on whether they have single or family coverage, with the town paying the remainder.
Knightstown resident Jim Hope asked if consideration had been given to requiring town employees to pay a greater share of their premiums. He said that when he worked at a factory job, he had to pay $35 a week for his health insurance.
"Yes, our employees have it very good," Haines said. "And they know that."
Council member Valerie Trump noted that town employees had not had a raise since 2005. She also said that their pay was on the lower than their counterparts in other towns of comparable size.
"On the other hand, if we gave them the salary that they would have been making in another community and offset it by contributions to healthcare, it would probably wash out," Trump said. Haines agreed, and said that if town employees received more pay, they would have to pay a greater share of their premiums.
Glenn, whose husband, David, is the town council president, noted that the town's utilities pay for health insurance costs for 13 of the town's employees. "All of this doesn't come out of taxpayers' money," she said. "The light, water and sewer utilities pay their own shares. All of the employees that work for those departments, that comes out of those utilities. … It doesn't come out of tax monies. We're self-funded."
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