The township might be instituting a new and different insurance program that could potentially reduce costs in the future. Representatives are reporting that the township will explore a new “self-funded” insurance program to help cut down on medical insurance premium costs.
Township Manager Tom Czerniecki said the council would look closely at the new plan and see if the change will benefit its employees, while also cutting down on costs as Evesham Township moves into the future.
If the program were initiated, the township would take all of the money that it currently pays for health insurance premiums and put it into a large employee pool. The township will hire a third party company to manage the pool of insurance premium money, Czerniecki said.
The way the program would work, Czerniecki said, is that an employee would put in a claim for a health cause and it would be taken out of the employee pool.
“An employee would submit a claim and it would paid out of the budget that would otherwise go to health insurance premiums. That’s a very simple way of looking at this,” Czerniecki said. “We would buy umbrella policies and lets say your individual costs exceed a certain dollar amount, the policy would kick in.”
The township would cover the insurance premium costs until the employee reaches a certain threshold, Czerniecki said, then the insurance policy would begin for the employee. It’s basically as if the township is creating its own insurance company, he said.
“The savings would be a slowdown of growth in that line item. I think the metric you would use is seeing the current growth of our state benefit plan. It increases every single year, same with every other plan, but this plan would possibly grow at a slower rate,” he said.
This is not the first change the township has looked at for its insurance costs this year. In July, the members of the Evesham Township Council agreed to have all township employees pay between 20 and 30 percent of their health benefit costs starting on Jan. 1, 2012.
The township will require employees in the state’s family health insurance plan to pay 30 percent — approximately $432 a month — of their health care premiums. An employee in the single plus plan will pay 20 percent — or $114 a month — of their health care premiums.
Currently employees only pay 1.5 percent of their gross salary to their health care plan.
The measure will save the township $350,000 on an annual basis. Back in July the township said it would look to see if moving into a private health care provider would make more sense for the municipality and offer additional savings for township taxpayers.
