The employee health insurance fund of St. Joseph County in Indiana is in severe deficit, and city officials believe the county’s health insurance broker is partly to blame.
According to officials, a communications blunder led to the county’s employee health insurance fund sinking into the red by $5.8 million.
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South Bend Tribune reported that the error could be traced back to the county’s auditor. The auditor failed to consider the cost of retirees when calculating the budget for health benefits, accounting only for current employees. This oversight began a few years ago, and only came to light recently – and too late.
The self-funded insurance plan provides coverage for roughly 1,070 county employees and 200 retirees. R&R Benefits, the county’s health insurance broker, manages the plan.
Due to its role in managing the county’s health insurance fund, some officials have argued that R&R should have stepped in the moment it caught wind of the oversight.
County Auditor Mike Hamann, who took office in 2015, acknowledged that his office somehow missed the budget mistake, but maintained that R&R should have warned him of the fund’s depletion.
When asked for an official response on the matter, R&R COO Bob Frick told
South Bend Tribune in an email that the company “will not comment on client’s business.”
Typically, benefits firms work alongside their clients to come up with sustainable health insurance budgets.
“There is sometimes a disconnect between the major branches of government, and we try to bridge those gaps and help counties come up with budget numbers that are accurate,” Apex Benefits adviser Bill Sylvester said.
Preparing budgets for clients is “a part of our normal job duties,” on top of providing monthly reports on spending, explained USI Insurance Services consultant Jenny Noel-Brandt.
This is not the first time R&R has been entangled in controversy. Earlier this year, several county council members pushed to hire a different broker, reasoning that the county could get a better service at lower prices. The proposal, however, was rebuffed by the county Board of Commissioners.
The commissioners reasoned that the cost of the county’s insurance plan remains low (about $12,800 annually per participant) compared to what other local governments in the region pay. By switching brokers, they argued, the county risks paying for more.
Despite this, some county council members are perplexed by the decision to stick with R&R.
“If we were getting proper monitoring and reports from our healthcare broker, maybe we would have caught this problem earlier,” commented county council member Robert Kruszynski Jr.
Mark Catanzarite, another county council member, pointed out that since fall 2015, the commissioners have opposed the county council’s efforts to study whether another broker could save the county money.
“We’ve just gone on the good faith and the word of the county commissioners,” Catanzarite remarked. “I’m not happy with the advice we were getting.”
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