The city of Preston faces a 15% increase in health insurance costs for 2018. Only a 10% increase had initially been figured into next year’s budget. At the October 2 council meeting, City Administrator Joe Hoffman explained the reason for the unexpected increase and possible options to lower health insurance costs in the future.
The city purchases health insurance through the Southeast Service Cooperative. This is a pool used by cities and counties in southeast Minnesota and administered by Blue Cross. The city’s premiums go into the pool along with other cities and counties.
Hoffman noted that Preston’s claims were down, but claims in the pool were up. It is a shared risk. Preston has been in both the low cost and the high cost group over time. Sometimes their cost is subsidized by the pool and sometimes they will be subsidizing the pool. This is why Preston’s cost is increasing when the city’s claims didn’t go up.
Hoffman explained they could lower costs by reducing benefits. One option would be to adjust the network. Providing a network that does not include Mayo Clinic would reduce premiums. Co-pays could be adjusted to reduce premiums. They could also choose to use a PEIP (non-state public employee) plan or the private marketplace. These last options could provide tremendous volatility if there is a high cost year.
City employees will see their deductibles increase in 2018; $100 higher for a single and $200 higher for a family. The increases are due to required minimum deductibles by the IRS.
Currently, premiums are paid 85% by the city and 15% by employees. Both the city and employees will be paying a 15% increase in their portion of the premium. Mayor Kurt Reicks said any other changes or increases will need to be negotiated with employees. No action was taken.
Other business in brief
• Jim Bakken, Public Works, presented an estimate from Ironside Trailer Sales in Harmony in the amount of $6,807 for the purchase of a new 9-foot 2-inch Boss V-plow to be mounted on the 2017 Ford pick-up. A plow that was purchased last year will be mounted on the new Chevy pick-up at a cost of $1,314. Bakken said they still have a V-plow purchased in 2009. Ironside has offered to take the 2009 plow on trade, allowing $2,500 for it. The council approved the purchase of the new plow and the mounting of the plow purchased last year with the 2009 plow trade. The total cost with trade will be $5,621.
• Hoffman suggested a committee be formed to discuss some small security upgrades to city hall. He asked that two council members along with a utility commission member serve on the committee to review the proposal and make a recommendation to the council. Hoffman estimated the cost of the upgrades to be less than $2,000 plus $400 per year. Councilmen Robert Maust and Charles Sparks will serve on the committee.
• Preston EMS has received a grant in the amount of $3,000 from Compeer Financial (AgStar Financial). The grant was used to purchase additional pagers. Eight new pagers cost $3,232. The grant does not require a match, so EMS will only pay $232, the amount exceeding the grant funding.
• The Preston Area Arts Council will hold a dedication/ribbon cutting ceremony for the mural “Hooked on Preston” on Wednesday, October 18 at 2 p.m. in front of city hall.
• The council will meet on October 16 and November 6 at 6 p.m.