Jackson County will save $500,000 by switching employee health insurance

JACKSON COUNTY, Mich. – Jackson County employees will get a new health insurance provider next year, and while they shouldn’t expect many changes to their benefits, they will pay a little more for them, officials said.

At a special meeting on Tuesday, September 27, the Jackson County Board of Commissioners unanimously approved the transfer of the county’s health insurance provider from Blue Cross Blue Shield to Priority Health for active duty employees and retirees under the age of 65.

The switch, which takes effect Jan. 1, will save the county an estimated $543,697, Human Resources and Labor Relations Director Michael Karabetsos said. Currently, 416 active employees and 144 pensioners under the age of 65 use it.

Medical benefits are currently provided by Blue Cross/Blue Shield of Michigan for full-time and part-time active duty employees and retirees under the age of 65. Retirees age 65 and older get a Medicare supplement plan through Varipro/Humana. Dental and vision insurance, available only to full-time and part-time employees, is provided by BC/BS of Michigan.

Jackson County conducts an open request for proposals for insurance providers each year. This year, the county received bids from BC/BS and Priority Health.

Prices are increasing nationally, and while both options presented to the county are an increase over what it currently pays, Priority Health submitted the more competitive bid, Karabetsos said.

ÔÇťOverall, there will be an increase in costs one way or another, whether we choose Priority or Blue Cross. It’s just that the size of that increase (is smaller) if we move to priority health,” Karabetsos said.

Jackson County currently pays $5,109,479 for insurance for active employees and $1,860,458 for retirees under 65. If the county continues to cover BC/BS, costs would increase by $862,960 and $292,164, respectively, Karabetsos said.

Priority Health proposed smaller cost increases of $585,361 and $126,066, respectively, resulting in savings for the county.

As for coverage, not much will change in employee benefits or what is covered, Karabetsos said. Only 3.5% of doctors, hospitals and prescriptions currently in the BC/BS network will not be in the Priority Health network, he said.

“This decision is not just monetary, but how it affects our employees,” Karabetsos said. “Anything above 90% is considered very good for transition.”

Some of that disruption will come in prescription coverage, Karabetsos said. Last year, there were 12,900 prescriptions written in all county plans, and about 0.2 percent will require validation through Priority Health to continue approval of coverage, Karabetsos said.

Also, Sparrow Hospital is no longer a participating hospital in the Priority Health network, but McLaren Greater Lansing Hospital is in that network for the Lansing area, he said.

However, Commissioner Cory Kennedy, District 3, raised concerns about the cost of employee contributions to the new plan. While the savings to employees isn’t as significant as the county’s, the increase in what they’ll pay for insurance is less with Priority than it would be with BC/BS, Karabetsos said.

In the new plan, a family will see a $63 increase for PPOs and a $644 increase for HMOs next year, Karabetsos said.

Several officials at the meeting expressed concern about the change. While there aren’t many outages, some will still struggle when it comes to a switch like this, said County Clerk Jeremy Burns.

“As we look at the benefits package, we know there are transition difficulties, it’s been very difficult for many of the employees in the past, and I just wanted to highlight those things,” Burns said.

However, County Commissioner Jerome Alexander, District 7, assured Burns that employees and their families can keep the same benefits they have just with a new provider.

“As far as the county here, we don’t change your benefits, we can’t change your benefits,” Alexander said. “They’re just coming from another source, and other than those prescriptions we talked about, we shouldn’t have any problems.”

At the meeting, commissioners also approved a new contract for a Medicare supplement plan through Varipro/Humana for medical coverage for retirees age 65 and older for 2023, as well as a contract with Blue Cross/Blue Shield for dental and vision coverage for full-time active duty employees. and part-time for 2023.

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