Mountain Home City Council members renewed the city’s health insurance plan for 2020 with several adjustments Thursday night, and warned municipal employees that further changes may still be required.

The city is facing an estimated $400,000 increase in its healthcare premiums next year, Mayor Hillrey Adams told a standing room-only City Council audience packed with municipal workers Thursday night.

“Right now, if we stay the same, we’re looking at a $400,000 increase for 2020,” he said. “Now, I have no problem doing that if you find me $400,000. But I don’t think that is something the city is prepared for.”

Council members voted 7-0 to renew the city’s contract with Blue Cross Blue Shield on Thursday night after also considering insurance plans from United Healthcare and QualChoice.

The Blue Cross Blue Shield renewal comes with a 23 percent increase in premiums.

The City of Mountain Home pays for 80 percent of the premiums required for the city’s health insurance, leaving employees to pay the remaining 20 percent. This 80-20 split is the same, regardless of whether the employee has individual coverage, covers themselves and a spouse, themselves and their children, or their entire family.

Beginning next year, a city employee per month will pay an additional $18.22 for single coverage; an additional $39.30 for coverage for themselves and their spouse; an additional $28.57 for coverage for themselves and their children; or an additional $52.82 for family coverage.

Deductibles will rise from $575 to $700, the plan’s co-insurance maximum will climb from $2,300 to $2,500 and the plan’s co-pays will increase from $35 to $40. Employees will also pay $5 more for certain prescription drugs.

The city is essentially locked into the 80-20 premium split for all employees. Having been established prior to the adoption of the Affordable Care Act, the city’s health insurance plan is “grandfathered in” and exempt from ACA requirements. Any major changes to the plan — like reducing the percentage of the premiums paid for by the city — would see the city lose its grandfather status and require it to comply with ACA requirements.

The city has 165 employees and provides coverage for more than 400 people on its health insurance plan.

One of the topics discussed in the nearly hour-long session on health insurance was the idea of the city requiring employees’ spouses to enroll in their own employer’s health care plan if one was available.

“If you have a spouse that has no other health insurance options — they’re not on Medicare, they’re not employed and can’t get insurance — they would stay on the city’s coverage,” council member Jennifer Baker said. “We aren’t trying to kick anyone off and leave them without insurance.”

In a survey of city employees, 48 responded that they had a spouse that is eligible for other health insurance plans.

The city will continue looking at ways to reduce its premiums, Adams said. The mayor said he planned to begin meeting with department heads this week to discuss the insurance situation with them and receive feedback from employees.

“I’m looking at you guys to point me in the direction we need to go,” he told city employees Thursday night.

A final decision on what actions the city will take is not expected until mid-October.

“This is a struggle we’re going to have to make a decision on and look at the city overall. Whether it’s cutting here or cutting there, we’re going to make the best decision that we can for everybody,” council member Bob Van Haaren said. “If you’re talking about pulling $400,000 from payroll and you have to turn that into a decrease in jobs, then you’re really going to be looking at a problem. I don’t think anyone wants to see that happen.”

Council members voting in favor of renewing the city’s contract Blue Cross Blue Shield included Van Haaren, Baker, James Whalen, Wayne Almond, Paige Evans, Jim Bodenhamer and Eva Frame. Council member Don Webb was absent.

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