Brainerd city employees will maintain their same health insurance provider next year after extensive discussion.

The city will see a 3% premium reduction in its policy with Sourcewell HealthPartners for 2021, with a second year maximum increase of 12% for 2022.

Discussion Monday, Oct. 5, centered around the employee insurance committee’s choice to recommend HealthPartners over Minnesota Healthcare Consortium, run by Blue Cross Blue Shield.

Having used Sourcewell HealthPartners insurance for the last several years, the city decided to do a market review of health insurance providers and solicit requests for proposals. The last time the city did this was in 2008, but city staff did it themselves. This time, the city retained North Risk Partners as a broker to assist in the review. The city’s employee insurance committee met with the broker three times in September to determine the best option. The committee narrowed seven options down to two — HealthPartners and Minnesota Healthcare Consortium. Though the Consortium plan offered a 6.7% premium reduction for 2021 and second year rate cap of 9% for 2022 — greater savings than the HealthPartners plan — staff outlined greater benefits with HealthPartners that led to the committee’s 3-2 decision to go with that plan. The committee consisted of representatives from the city, Brainerd Public Utilities and the Housing and Redevelopment Authority, along with department heads and management teams for all of those entities.

The decision did not come easily, Human Resources Director Kris Schubert told the council’s personnel and finance committee Monday. But she outlined several benefits of HealthPartners over Consortium, including:

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  • HealthPartners offers a more robust wellness program, with greater annual wellness grants, an online wellness platform and on-site biometric screenings and flu shots.

  • HealthPartners offers an Employee Assistance Program at no additional cost, whereas it would be an add-on for the Consortium plan.

  • Infertility benefits are enhanced with HealthPartners,

  • Consortium does not offer CVS or Target pharmacies as an option for prescriptions, and 18% of city staff prescriptions are currently filled at Target.

  • HealthPartners offers incentives for using Top Value providers for certain procedures.

The rate cap increases for the second year — which are 12% for HealthPartners and 9% for Consortium — do not necessarily indicate what the price will be, as they are both “worst case scenario” prices if there are high claims in the first year. And depending on the rate renewal for 2022, Schubert said the city can solicit quotes again.

Despite the greater upfront financial savings with Consortium, a lot of staff hours would have to go into switching nearly 100 employees and their dependents over to a new plan and updating billing procedures, Schubert said. Time would also be needed to educate employees on their new benefits and the new system, and human resources and payroll staff are already spread thin, Schubert added.

Council member Tad Erickson, who sat on the employee insurance committee, was one of the three votes to maintain Sourcewell. While it is less of a decrease than the Blue Cross Blue Shield plan, it’s still a decrease in the premium, he said.

“That was a big factor for me,” Erickson added. “... It was just a tough decision between those two, but I do think it was the best decision to stay with Sourcewell for several reasons.”

About the plan

Under HealthPartners, employees will be able to choose from three smart plans, as Sourcewell calls them. The three plans the council agreed on have deductibles of $1,400, $2,800 and $7,000.

The $7,000 deductible plan is the highest deductible available, which Schubert said some employees have asked for. The lowest deductible plan of $1,400 is higher than the $1,000 deductible plan currently offered to employees. Adam Olson, a representative of North Risk Partners present at Monday’s meeting, said while the deductible is higher on this plan, the out-of-pocket maximum is lower. But only five employees currently use the $1,000 deductible plan, Schubert said, and staff will work with them individually to explain the changes.

All the plans are compatible with employees’ current health savings accounts, which Finance Director Connie Hillman said employees seem to like.

“It isn’t just about the dollars and cents sometimes,” Hillman said. “It’s the bigger picture.”

Council action

After approving Sourcewell HealthPartners as the insurance provider for 2021 and agreeing on the three smart plans, the council also agreed to retain North Risk Partners as the city’s insurance broker for 2021 for a cost of $19,000.

The city has had a broker in the past, Schubert said, but it was not as active at North Risk Partners, which she said has been beneficial. During the recent search, she said Sourcewell’s original 2021 proposal did not include a premium decrease. That was added after Olson reached out to Sourcewell again asking for any final proposals as the city’s incumbent provider. The city’s portion of the $19,000 broker fee is $8,089, BPU will pay $8,277 and the HRA will pay $2,634.

With the broker fee added in, the city will still save about $18,000 in insurance costs from 2020 to 2021.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa.