Ypsilanti Township could see $600,000 in employee health care savings
Ypsilanti Township is projecting it will save $600,000 on health care next year with a new way of providing insurance for its employees.
The township Board of Trustees and union heads worked together to help find the savings, which will go into effect in 2012.
Employees agreed to a higher deductible in exchange for lower premiums, but the township is covering those deductibles with a pool of money. If someone exceeds their deductible, then the insurer, Blue Cross/Blue Shield, covers the rest.
Officials say they are “self-insuring” their employees and their families up to $12,000, while they previously paid closer to $20,000 per family. Individuals are covered by the township up to $4,800, while the township previously paid $9,200 per individual.
The township is finding the savings while maintaining the same level of insurance, and employees won't have to pay copays either.
Ypsilanti Township has around 100 current employees or retirees under 65 and approximately another 100 retired. It will see an estimated $400,000 in savings from the current employees pool and another $200,000 from the retirees.
But the savings are only estimates because the insurance is user-based. Most individuals don’t use more than $4,800 in insurance each year and most families don’t user more than $12,000, so the savings could be greater if everyone uses less. But if someone uses more than their deductible, then the savings could be less in 2013.
A worse case scenario is if someone has a terminal illness or costly medical issue. Because there is the potential to not realize any savings the following year, Clerk Karen Lovejoy-Roe said the Township is setting aside their first year of savings instead of immediately spending it.
Once the township sees what kind of savings it is going to realize and establishes an adequate insurance fund, it will begin spending the savings. Roe said around 40 municipalities statewide have switched to this system and the $600,000 in savings are a conservative estimate. She said based on data from how the plan has worked in other municipalities, the township will likely see greater savings.
The township’s union heads, Trustee Mike Martin, Lovejoy Roe and Human Resources Director Karen Wallin worked with representatives from Marwil and Associates to establish the plan.
"It’s a win-win, and it’s rare you get to say that,” Lovejoy-Roe said. “It is a new way of thinking about and paying for health care, but it met the goals of the health care committee … which were to keep costs down for both the township and employees, to provide good health care benefits and to meet the new state legislation.”
Martin said officials have guarded optimism that the new plan will realize the anticipated savings.
"I think it’s an exciting prospect that we can maintain the health insurance coverage of the township's hardworking employees while saving potentially hundreds of thousands through an innovative insurance plan," he said.
Comments
Michigan Reader
Tue, Dec 6, 2011 : 9:59 p.m.
Sounds like a wise plan.
leaguebus
Tue, Dec 6, 2011 : 6:01 p.m.
Gee, when I want more services, I expect to pay for them. We who live in the larger cities in the county have subsidized the townships for years as far as the Sheriffs department goes. Time to ante up just like we have to for our Police departments.
thedime
Wed, Dec 7, 2011 : 3:54 a.m.
Name one city in the county, besides Ann Arbor, that is larger than Ypsilanti township. You can't. Ann Arbor , Pittsfield, Chelsea, Milan and Saline have their own independent law enforcement departments. How can they subsidize something that isn't there. Where does Ann Arbor house their prisoners?
dading dont delete me bro
Tue, Dec 6, 2011 : 7:05 p.m.
*** but they aren't called "police"...
deetdeedee
Tue, Dec 6, 2011 : 5:01 p.m.
"can we get some wcsd patrols going now?" Seems like a fair question to me? weird........Take those funds and use them elsewhere, where they seem to be so despirately needed.......
Monica R-W
Tue, Dec 6, 2011 : 4:23 p.m.
Comments like above is why instead of being internet posters, folks should attend a Ypsilanti Township Board of Trustees meeting. No, the savings can't be used to "hire more police". First, the Washtenaw County Sheriff's Office....has sheriff deputies. They aren't called "police". Second, the "savings" is by tailoring in the ways the employees of Ypsilanti Township receive benefits. The state mandated that all local, county and school district governmental bodies meet a 80/20 benefit level. In other words....80% employer would pay/20% employee would pay. Thus, the savings is by employees paying a higher level of premium payment (and/or using less of their allotted benefits) and the local governmental entity paying less. Reading is fundamental here. From the article: "Most individuals don't use more than $4,800 in insurance each year and most families don't user more than $12,000, so the savings could be greater if everyone uses less. But if someone uses more than their deductible, then the savings could be less in 2013. A worse case scenario is if someone has a terminal illness or costly medical issue. Because there is the potential to not realize any savings the following year." Again, the 600K a year is estimated/project savings by the employee using less or "set level" of benefits. If a majority of employees go over the $4,800 Individual/$12K family scenario...the cost would increase for employees for and premium costs would increase for the employer. End result....not as much of "projected savings". I applaud the Ypsilanti Township Board of Trustees and their unions for doing their best with meeting a unreasonable demand by state GOP government and Gov. Rick Snyder on how a individual governmental entity allocates their cafeteria health benefits. The bigger question is why is the state telling Ypsilanti Township and other local, county and school board entities, anything in what ways they provide health car
Monica R-W
Tue, Dec 6, 2011 : 4:29 p.m.
End sentence that was eliminated: The bigger question is why is the state telling Ypsilanti Township and other local, county & school board entities, anything in what ways they provide health care for their employees. Correction in paragraph five- the second for in "the cost would increase for employees for"- should be eliminated.
dading dont delete me bro
Tue, Dec 6, 2011 : 3:07 p.m.
can we get some wcsd patrols going now?
dading dont delete me bro
Tue, Dec 6, 2011 : 3:22 p.m.
spending it on police protection would make way too much $en$e. how about a statute?
deetdeedee
Tue, Dec 6, 2011 : 3:12 p.m.
I thought we'd use the savings to spend on some Art? Oh wait, this isn't A2. Doh!
deetdeedee
Tue, Dec 6, 2011 : 3:06 p.m.
"It's a win-win, and it's rare you get to say that," Lovejoy-Roe said. "It is a new way of thinking about and paying for health care, but it met the goals of the health care committee … which were to keep costs down for both the township and employees, to provide good health care benefits and to meet the new state legislation." That's awesome, let's be proud about the first time we figured out a way to manage finances other than asking tax payers for more money. This is what they are elected to do. DO IT!! Don't strain yourself patting yourself on the back now.......