City plans for rising health care costs

Columbus is budgeting for higher employee health care costs in 2021 and will be passing some of that cost on to its employees.

The city’s 2021 budget includes a $350,000 increase in the cost insurance benefits funding due to rising health care costs. The city council passed the budget on its first reading on Oct. 6 with second reading set for Oct. 20.

Health insurance premiums for city employees will increase by 6.2%, according to calculations provided by Johnson and Associates, a benefits consulting firm advising the city on insurance matters.

“To maintain proper funding, Johnson and Associates has recommended a 6.2% increase, and so that’s what we’ve budgeted for on the city side, as well as for employees on their share of the premiums,” City Finance Director Jamie Brinegar said.

The increase is less about the COVID-19 pandemic and more part of a long-term trend; during the past 10 to 15 years, health care costs have increased “almost exponentially,” he said.

“We’re just covering that trend on our end to make sure we have sufficient funds within our health insurance trust fund to cover any health care costs as part of our plan,” he said.

While $350,000 is no small sum, it is noticeably smaller than the last increase. As part of its 2020 budget, the city budgeted an additional $800,000 for insurance benefits funding.

In 2019, the city paid about $8.6 million in health insurance trust fund expenses, in what Brinegar called its “worst year ever.”

“This year, we’re on track to be at about $7 million to $7.5 million in payments, which is more where we would expect to be for a community of our size,” he added.

Brinegar said that as health care costs continue to rise, the city has implemented different efforts to lower those costs. One is “lunch and learn” events where visiting individuals, such as a Purdue Extension agent, instruct employees about “healthy options.”

He added that the city has also looked at “wellness plans” for employees and wants to encourage them to get a physical exam every year.

“It’s surprising the number of people who are on health plans that don’t get their physical every year,” he said. “They make sure they care of their dependents, but they don’t always take care of themselves as much.”

Physical exams help people spot health problems early on, which makes treatment less expensive, he said. The later those problems are spotted, the higher the cost of treatment.

“We’re just responding to national trends in health care cost increases as everyone else is, seeking ways to partner with our employees to try to drive down their costs,” he said.