Chester County workers balk at new insurance costs | News

WEST CHESTER — Some Chester County government employees received what they say was an unpleasant surprise when they opened a recent e-mail from the county Commissioners Office about their proposed medical benefits for 2021.

In the accompanying memo, alongside information about the county’s wellness program, continuation of prescription, dental and vision coverage, and a new web-based physician consultation service, was the alarming news that the out-of-pocket maximum payments for plan participants would be increasing.

And not by just a bit. The new amount that employees would be responsible for will increase by 100 percent in most cases, and by as much as 150 percent in others. The thought that their costs would double came as a shock and an outrage to those who had long seen the benefits package they receive as public employees as the foundation on which their service to the county rested.

“You never came here for the salary,” said one employee who has worked for the county for more than 25 years.”You came for the insurance (benefits.)” The employee, who like others quoted in this story asked to remain anonymous out of concern for what might happen if their identities were known, said she had been anticipating major surgery next year. Now, she is afraid it might provide too costly.

“I don’t have that kind of money,” she said of the $5,000 she would be responsible for under the new plan. “But this is not only problematic. It’s extremely upsetting. I don’t know if I can afford to stay here. It’s scary.”

County administrators, however, say the concerns that employees might have is exaggerated and unfounded. Few of those participants in the medical plans — between 1 percent and 3 percent of those covered — will have to pay the new out-of-pocket maximums, they estimate, and additional provisions in the plan will help alleviate any financial worries they might otherwise have.

“We believe this will have a minimal impact on county employees,” said Tiffany Sowers, the director of county Human Resources in an interview last week. “Most of the people who work for the county will be covered 100 percent” as they have in the past.

The out-of-pocket expenses will only affect those who have significant medical issues that require intensive treatment or long hospital stays involving catastrophic events, Sowers said. The increase was necessitated by a near $2 million spike in the cost of medical insurance the county must pay its carrier, Independence Blue Cross, the majority of which is being borne by the county, not employees.

The news of the increase in out-of-pocket expenses was included in a Sept. 15 e-mail to all county employees announcing the beginning of the county’s open enrollment period for health care benefits. But perhaps because the e-mail seemed benign or unremarkable to many employees — who had worked for the county for years and had no intention of changing their plans — many did not open it to read. Some reflexively deleted it, they said when asked.

“What changes?” was a common response when a reporter asked workers what they thought of the increases.

But some of those who did look at the e-mail were angered and astonished. The hike seemed to them to break an oft-spoken trade-off for county workers — their annual salaries or pay rates would be less what they might find in the private sector, but their benefits would make up for that.

There are approximately 2,400 county government employees, about 2,100 of whom are considered full-time and thus eligible for medical benefits. Their salaries run the gamut: a newly hired telecommunicator at the county Department of Emergency Services makes about $37,500 and a clerical supervisor earns $24 an hour, while a department head might be paid closer to $94,000 and someone with a specialized job — say a security expert — would be paid about $97,000.

But a large number of the jobs in the county court and government offices are clerical in nature, with those employees earning in the high $20,000s to mid-$30,000 range. Those employees, those who spoke for this article, could least afford a significant increase in their medical costs of faced with illness or surgery.

“It would not come across as so unfair if they kept up with salaries,” said one longtime employee. But the county’s across-the-board salary increases have been moderate, at best, they say. “How can charge people this on a medical plan when you are not keeping up with salaries? Why are you treating your employees like this?”

The workers who spoke were also quick to point out that Chester County is not only the wealthiest county in Pennsylvania — with median incomes for households just above $99,000 — but among the richest in the nation. And county property tax rates have been kept relatively low, with no increase in its millage rate since 2017. The county could afford to pay increases in insurance costs by placing the cost on the taxpayers, they suggested.

In the memo, the county laid out the out-of-pocket expense increases as such:

The “Legacy” plan, which most participants choose, would see an increase from $2,500 to $5,000 for a single person, and from $5,000 to $10,000 for a family from an in-network provider, which most employees have, Sowers said. For an out-of-network provider, the costs would rise from $4,000 to $10,000 for a single person and from $8,000 to $20,000 for a family.

The county “Value” plan would increase for singles from $4,000 to $10,000 and from $11,500 to $30,000 for a family.

Essentially, an out-of-pocket maximum is the amount a policyholder must spend on eligible healthcare expenses through copays, coinsurance, or deductibles before the insurance starts covering all covered expenses. Because of this, a policyholder’s deductible will always be lower than the out-of-pocket maximum.

“$30,000 a year?” Remarked one employee. “That’s ridiculous. How can you ever possibly pay that off?”

Sowers said that the county is faced with an increase in the $25.6 million it budgets for benefits of almost $2 million in 2021. The county will offset the increased costs by paying for 87.5 percent out of the general fund, while having employees make up the remaining 12.5 percent, she said. Sowers said the county’s provider and broker had suggested the standard 100 percent increase, rather than something lower.  

The commissioners were asked why the county had decided not to pick up the entire cost of the increase as it had in the past; insurance costs rose by $1.3 million in 2020 from 2019, with no change in employee out-of-pocket payments. 

In a statement, the commissioners — Chairwoman Marian Moskowitz, Vice Chairman Josh Maxwell, and Commissioner Michelle Kichline — indicated that upcoming budget hearings would have to take into consideration the impact of the coronavirus pandemic costs on the county.

“The first of our budget hearings for 2021 will begin a few weeks from now, which is when our Finance team will start presenting recommendations for the 2021 budget and what that may mean for the property tax rate,” the statement read. “Those recommendations will have to include allowances for unknown costs related to COVID-19 as well as forecasts for income and expenses for all of our programs and services.”

The statement also alluded to the fact that the county had not laid off employees or cut benefits during the pandemic quarantine period earlier this years. No increases for paycheck contributions to medical benefits or hikes in deductibles are planned, as well.

The county also hinted that had it to absorb the new insurance costs on its own, layoffs could be considered. “Such is the cost of healthcare benefits for the county, this increase in out-of-pocket costs also keeps the county from having to consider any reduction in staffing levels,” according to a fact sheet provided in response to questions about the benefits.

“The work that our county employees do, and the services they provide are second to none, and we truly appreciate that,” the commissioners stated. “We were pleased to be able to pay full salaries and provide full health benefits throughout the pandemic, and we have always tried to keep our employee healthcare contributions and costs as low as possible.”

Sowers also pointed to the numerous ways the county has tried to keep health care expenses as low s possible for employees. There is an option of a flexible spending account that employees to put aside money on a pre-tax basis into their own reimbursement account for medical expenses

Its wellness program also helps to control the cost of healthcare increases while encouraging employees to pay more attention to their health, the county said.  Employees who participate in the wellness program receive a reduction in contributions of $420 over the course of a year.

In the end, perhaps the employee reaction was summed up by one young worker. “I understand that costs are going up everywhere,” the worker said. “But what am I going to do: Not take their insurance?”

To contact staff writer Michael P. Rellahan call 610-696-1544.

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