Changes Coming To Cookeville Employee Health Insurance

Both employee budgets and the city budget could take a hit from Cookeville’s City Employee Health Insurance.

City Manager James Mills said that the city’s health insurance is self-funded, meaning the city and the employees contribute to a fund to pay claims. He said that with COVID and major claims depleting the city’s health insurance fund balance over the last two years, changes need to be made before it goes in the red.

“There’s no doubt about it both the employees will have to pay more and the city, the proposal we’ve looked at, the city would pay significantly more,” Mills said. “And it’s unfortunate that we have to do this, because those are monies we could use for other things possibly including pay raises. Of course, we’d still like to be able to look at that.”

With one bad year turning into two, Mills said it’s hard to predict this trend continuing in the future. He said that’s part of the issue with insurance because you never know when a major claim could occur.

Mills said the city has been self-funded for many years, with its good fortune running in cycles.

“You’ll have a couple of good years where you actually can put money into the fund and you end with a net positive in the fund,” Mills said. “But the last three years in a row we’ve had a drain in our insurance fund and it’s getting seriously low now.”

Mills said the city’s advisors are recommending some kind of increase, as it could put a damper on other city plans and what it is able to do.