DeKalb investigates new insurance idea

By Donald Roth Jr.

With the malady of skyrocketing health insurance costs continuing to infect much of America, one phrase is becoming prevalent: save money.

The city of DeKalb is no exception. It currently is investigating a revolutionary health insurance idea that could save the city thousands of dollars, DeKalb Assistant City Manager Dean Kruithof said.

The method would call for DeKalb to self-insure and utilize a third-party administrator for its employee health insurance, he said.

The current contract for health insurance DeKalb holds with Lincoln Insurance Company is set to expire in April, he said. There is also a possibility that the company will be sold.

Historically, DeKalb’s health insurance costs have increased by about 20 percent a year, Kruithof said. DeKalb is also seeking to minimize the costs of traditional health insurance.

Self-health insurance would call for DeKalb to contract with a third-party administrator who would determine the amount of risk (monetary), he said.

DeKalb would then place that amount of money in the bank, he said. Any health insurance claims by city employees would be paid out of that money.

Through the use of a self-health insurance plan, DeKalb would enjoy two unique benefits, Kruithof said.

Not only would DeKalb save money on health insurance costs, it would earn interest on the money it has in the bank, he said.

Kruithof said self-insurance does not relinquish DeKalb’s responsibility to provide protection in the event of a health crisis or catastrophe.

“We would purchase an umbrella policy that would put a cap on the amount of money Dekalb would have to any one employee,” he said.

While saving money in health insurance costs is of great concern for DeKalb, it is not the only concern.

Kruithof said DeKalb is looking into several employee wellness programs that would decrease the risk for disease and injury.

“We are working on developing a wellness program that would help shape attitudes toward topics such as smoking cessation, weight control and alcohol abuse,” Kruithof said.

He said healthy employees are more productive and reduce health care costs.

Kruithof, who was formerly a city manager in Pittsburg, Kan., helped to create a self-health insurance plan that saved the city about 4 percent last year.

“While the surrounding cities were facing large increases in health care costs, we were experiencing modest increases of around 4 percent,” he said.

DeKalb currently is working on a program to pay about $6,000 to certain employees who were accidentally overcharged on their insurance deductible, Kruithof said.

Containing costs and creating a health insurance plan that is advantageous to DeKalb employees is the main goal, he said.