Premera would save Homer money over Moda next year but raise employees' copays

Homer's insurance broker told the City Council on Monday that keeping city employees on their Moda health plan next year would cost about $197,000 more. Switching to Premera would cost less than the city pays now, but the 64 employees on the city's medical plan would face higher copays.

Renewing with Moda would raise the yearly cost of city employee benefits 7.9%, to about $2.69 million, according to the presentation from USI Insurance Services. Nearly all of the increase is medical coverage, which would rise 8.3%. Brian Hardy, a USI vice president, said at the meeting that Moda first proposed about 12%, and that competing quotes from Premera and the Alaska Municipal Health Trust helped USI negotiate it down.

All three Premera options USI priced would cost less than the roughly $2.49 million the city pays now. The one closest to the current plan would save about $33,000. It keeps the $1,000 individual and $2,000 family deductibles and the $4,500 and $9,000 out-of-pocket limits, but specialist copays would go from $25 to $60, urgent care from $25 to $80 and emergency room visits from $100 to $150. Primary care visits would cost $25 each, instead of $5 for the first three, and prescription copays would rise.

A second Premera plan would save about $93,000 but raise deductibles to $1,500 and $3,000 and out-of-pocket limits to $5,000 and $10,000, with $40 primary care visits and $80 specialist visits. A third, offered through the Alaska Municipal Health Trust, would save about $38,000 and cap its next increase at 5%, but Hardy said it is less competitive and would put the city back on a July renewal.

The Premera plans' yearly costs are roughly $230,000 to $290,000 lower than the Moda renewal. But Hardy cautioned that Premera "does look like they're somewhat buying the business," and said the city should probably expect another increase of about 15% from Premera the following year.

In May, the council chose a six-month extension with Moda over the 18-month contract city administrators had recommended. Hardy said Monday that the shorter contract, followed by Moda's renewal, would save the city about $200,000 compared with the longer one, though he said a drop in enrollment, from 71 employees to 64, makes the comparison inexact.

Council member Donna Aderhold said a plan that saves the city money "might be costing the employees substantially more," and that she wants to hear from employees. City Manager Melissa Jacobsen said the city's employee committee will review the options, and that a resolution is expected at the council's first meeting in November, ahead of the Jan. 1 renewal.