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Dramatic swings in Sauk County employee insurance premiums expose past overpayments

November 11, 2017 GMT

Failure to comply with its own ordinance has caused Sauk County government to over-contribute to its employees’ health plans for at least the last 3 years.

Administrative officials have not yet calculated the loss to taxpayers, but will apply the correct contribution amount under a new health insurance contract the Sauk County Board approved in September.

The change has caused a large, unexpected shift in county employees’ monthly contributions, with some plans seeing large increases and others showing a decrease.

“As I look at this, the county has been picking up far more than 88 percent,” Supervisor Andrea Lombard of Baraboo said Friday during a meeting of the board’s Personnel Committee.

Lombard is one of several board members who have heard from county employees that were caught off-guard by the recent change. She said she also wants to know how much the county has over paid in prior years.

Ordinance language that has been in place since at least 1996 says Sauk County government’s contribution to employee health plans shall be limited to 88 percent of the least expensive policy option.

The dollar amount that results from that calculation establishes the county’s contribution to all plans, even the more expensive ones.

However, officials now say the county began to deviate from that mandate as early as 2002.

During Friday’s meeting, Sauk County Personnel Director Michelle Posewitz attempted to explain what led to the deviation. The discussion that followed, as well as an explanation letter that Posewitz provided, left several supervisors scratching their heads in confusion.

Supervisor Henry Netzinger of Prairie du Sac said he still wants more information, but that there may be no option for recovering the lost money.

“That’s water under the dam,” Netzinger said. “We can’t do anything about it.”

Posewitz said labor contracts called for different contribution calculations in the years between 2002 and 2013. However, Republican state lawmakers’ controversial anti-collective bargaining bill ultimately decertified those agreements by the end of 2013.

It remains unclear why the county did not apply the mandate in its ordinance to a health insurance contract with Group Health Cooperative the county board approved in 2014. For that contract, documents show, the county’s 88 percent contribution was applied to the second-cheapest of three policy options. That meant the county paid more of the cost for employee health plans than its own ordinance allowed.

“I don’t know that we have an exact explanation for 2014, 15, or 16,” Sauk County Administrative Coordinator Alene Klekzek Bolin said in an email.

Posewitz’ letter mentions affordability standards set forth by Obamacare. If the county had applied the ordinance language to the Group Health Cooperative contract, her letter states, premiums for one policy would have been “$29 away from being unaffordable” under the law.

In response to a question about that part of the letter, Kleczek Bolin confirmed that all the plans offered by the county would have met federal affordability standards in 2015, the first year of the contract.

She said uncertainty regarding Obamacare, changes to employee compensation, and the final decertification of union contracts all were factors that prevented the county from following the ordinance.

The county recently sought proposals from insurance providers for another three-year contract beginning in 2018. But public scrutiny of that decision was limited.

In what an open records advocate called a “flagrant violation” of the law, Posewitz refused to provide the Baraboo News Republic with copies of the proposals until after the personnel committee selected a provider.

The county board then was asked to consider the committee’s selection of Unity Health Insurance – now known as Quartz – during its September meeting.

However, documents administrative officials provided to county board members prior to the meeting did not disclose the employee contributions under each plan.

The Baraboo News Republic has since used official county documents to calculate the employee contributions, and their percentage increase or decrease under the new plan.

The calculations – which Kleczek confirmed Friday – show changes to employee contributions are as follows: Co-pay plans will increase by 82 percent, HMO plans will increase by 52 percent, and point of service plans will decrease by 44 percent.

The committee took no action Friday. Posewitz suggested that the matter be dealt with as part of a comprehensive review of the county’s personnel ordinance.