By Linda Collins
For the Herald
ENON – The Village of Enon has found a solution to minimize a 25-percent increase in annual healthcare costs for village employees in 2016.
Enon Mayor Tim Howard announced during the Tuesday, Nov. 24 village council meeting that the village would absorb the costs toward an annual deficit created by higher-than-expected claims that exceeded the 2015 medical premiums of a state healthcare consortium.
According to Howard, the village received a letter in October from the Ohio Public Entity Consortium Healthcare Cooperative (OPEC-HC) announcing a 25 percent rate increase for 2016 that would cover a 12.5 percent increase in annual premiums and an additional 12.5 percent increase for a $6-to-$7 million projected deficit by Dec. 31.
The consortium explained that one of the major advantages is OPEC –HC’s ability to access reserves and spread any assessment of deficit recovery over a period of time, rather than collecting the shortfall all at once. Therefore, the deficit recovery is being built into the Jan. 1, 2016 renewal.
However, any of the 3,000 group members renewing their existing benefits may elect to pay the 12.5 percent deficit recovery separately from their monthly premiums because 2017 premiums will be based on the 2016 rates.
“This option would reduce the rates in 2016 from 25 percent to 12.5 percent. The 2017 premiums would then be based on the 12.5 percent increase rather than the 25 percent increase that would include the 12.5 percent deficit,” Howard said. “This will save the taxpayers money in the future.”
The mayor stated that the village would use appropriated funds from the 2015 budget to pay $1,000 per month over a 12-month period toward the village’s existing $12,000 deficit. This action, he noted, would reduce the 2016 premiums for the six village employees, covered by the plan, from $10,500 to $9,500.
“I want to pay this deficit out of this year’s budget,” he said. “We will just issue a purchase order to Mutual of Ohio and carry it over into 2016.”
Howard said the 25 percent rate increase placed the village in a tough spot because it is committed to a contract with the Ohio Public Entity Consortium Healthcare Cooperative through the end of 2017.
“The normal increase is usually eight-to-10 percent,” Howard said. “This is quite higher.”
The village council approved the contract with OPEC-HC in 2014 to avoid a significant increase under the village employees’ previous plan. According to Howard, 14 entities broke off from the county’s healthcare plan at that time and signed with the state consortium.
“We have to realize insurance benefits are not what they used to be,” Howard said.