Health and dental insurance premiums for Sioux Falls employees are the same now as they were 10 years ago. The details are cumbersome, but officials cite three main reasons they have managed to avoid increases. Leaders say the situation is unusual and it probably won’t last long-term.
The health plan for the City of Sioux Falls has about $14 million in claims every year. Compensation and benefits manager says, despite that price tag, employees haven’t paid higher costs for coverage for a decade.
"Now that doesn’t mean that we haven’t had increase in cost in 10 years, but, because we are self-insured, we have a reserve fund and we’re able to manage those spikes in increases with our reserve fund and the support that it provides to us," Uthe says.
Uthe says having partnerships with major health systems in the area, focusing on employee wellness, and educating workers on health strategies make it possible to keep premiums flat.
Human Resources Director Bill O’Toole says having self-insured coverage allows the city to offer incentives to use health care options wisely.
"For example, in a given month, if our revenues that we’re collecting in those premiums exceed the expenses, we can say, ‘Okay, this month, we’re not going to collect a premium from you for your health coverage as a result.’ That does help incentivize, and we think that’s been effective," O'Toole says.
O’Toole says that’s not to encourage people to avoid seeking medical care, but health leaders encourage people to take steps to prevent more serious conditions that are more costly both to individuals and the city.
The Human Resources Director says ten years with no increase is a milestone, but that probably won’t last forever.
"The tide can turn, and the reality is that there’s probably a chance that that’s going to happen, but we like to think that again we’re not having to move so quickly with the way that we manage the reserve, that you don’t have to do a steep increase in order to make it happen," O'Toole says. "Yet, just like any winning streak, they do end."
O’Toole says city government and workers have saved money by evaluating strategies in the plan. The City of Sioux Falls is responsible for 75 percent of health and dental insurance premiums. Employees pay 25 percent of the cost.