City of Temple Moves to Self Funded Insurance Plan

TEMPLE, TX - July 15, 2010- At the regularly scheduled City Council meeting this evening, the City of Temple Employee Benefits Trustees awarded a contract to Blue Cross / Blue Shield of Texas for third party administration and stop loss insurance to facilitate the City's move from a fully insured health plan to self funded insurance.

After years of being fully insured, the City was no longer able to continue this path due to the unsustainability of the increasing costs. The City received proposals in May 2010 for both fully insured plans and self funded insurance. Of three proposals received, the lowest cost proposal for remaining fully insured was submitted by the Scott & White Health Plan, but that proposal represented a 46% increase in cost to the City and its employees, with other plans proposing up to a 103% increase in cost. Blue Cross / Blue Shield of Texas submitted the best value for a self funded insurance plan out of three proposals. Blue Cross / Blue Shield in this case will act as the City's third party administrator and provide stop loss insurance. While the City will be self insured through Blue Cross / Blue Shield, the City will continue to offer to its employees the use of Scott & White facilities and doctors as part of
the Blue Cross / Blue Shield network.

City Manager David Blackburn comments, "One of the benefits we believe we'll see with a self funded approach is more transparency in our utilization and costs. This should help both the organization and our employees manage this valued benefit." In addition, this will allow the employees to be better stewards of their healthcare. The City has eliminated the existing three plan designs and has created two new plan designs. While rates will more than likely
still increase, the City's philosophy on moving to a self funded plan is to allow the City more control over future cost increases.

Blackburn says, " It is hard to give an ‘apples to apples' comparison of rates from current year to next year as we have not only changed plan designs, but are also moving from a fully insured plan to a self funded plan." He continues, "There are significant costs associated with starting a self funded plan for health insurance that have been borne by the City. In FY2010-2011, employees will typically see a 10% increase in their premiums depending on which of the two plan options the employee selects."

The City will continue with its wellness program, Fit for Duty, in an effort to educate employees in ways to improve their health which in turn should help lower claims. The City's wellness program encourages employees to maintain a high level of wellness in all aspects of their lives. The City provides opportunities for improving wellness through
incentives, educational programming, as well as, individual, departmental and city-wide challenges.

This self funded plan will take effect on October 1, 2010.