Wednesday, February 28, 2024
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Cookeville Will Explore Changes In Employee Insurance Citing Record Claims

Cookeville City Council will consider making changes to employees’ insurance premiums and deductibles.

Finance Director Brenda Imel said the decision to make the change came from a growing need to keep up with record employee insurance claims.

“That exceeded what we paid into the plan,” Imel said. “That reduced our reserves in the plan by a million dollars. That’s the largest one-year decrease that we’ve ever had. Expectations are that health insurance claims are going to continue to go up. We’re no different than what the national trend has been in health care costs are continuing to go up.”

Imel said that deductibles would increase $500 per individual, with employee plus family increasing two times that. She said they tried to increase premiums with minimal impact to employees, at $5 per month per individual and up to $15 for family coverage. She said the city would pay an increase of six percent in premiums on behalf of its employees.

Imel said this increase is projected to have a positive impact of about $470,000 and would cost the city about $215,000 annually.

Imel said that the proposed change in rates would affect both active employees as well as retirees. She said that retirees’ impacts will vary because they pay based on their years of service, with no increase for a majority of employees. Imel said some policies will increase as much as $36.

Imel said that the city had $5.8 million in claims paid out of its fund last year. With rising costs in medical treatments and prescription drugs, she said that the city has reached a point where they need to increase the money that goes into their plan.

“I hate that we have to do this,” Imel said. “But they’re projecting claims to continue to increase and we just got to keep up and keep our plan a good plan and keep it around for our employees.”

City Manager James Mills said that after exploring several options, this one made the most sense. He said that they wanted to take a small step this year and then evaluate the situation again.