Johnston County

Towns switching health plans

Two Johnston County towns are taking advantage of a new law opening the state health plan to municipalities, and another town might do so.

The town councils in Clayton and Benson have passed resolutions to join the plan next year, and each says it stands to save tens of thousands of dollars annually in premiums. After its town council meeting this, Selma might be the third Johnston town to follow suit.

During its most recent session, the General Assembly passed a law making local government employees and their families eligible for the same health-care coverage that state employees and teachers have. Lawmakers put a cap of 10,000 participants in the new plan, and with commitments expected to approach that number in the weeks ahead, Clayton and Benson appear to have just squeezed through the door.

By joining the state health plan, the Johnston towns are spreading the risk – and cost – of insuring their employees.

“With our 170-employee pool, we’re more vulnerable to sharp increases in premiums,” Clayton Town Manager Steve Biggs told the council at its Nov. 2 meeting. “If we strike now, we’re looking at a substantial cut for not just town employees but their dependents.”

Clayton’s decision came after a spike this year in health-care premiums. Biggs said the switch to the state plan would save 15 to 20 percent over the current premiums, but he added that once Clayton makes the move, it’s in the state health place forever.

“There is no switching back to an individual plan,” Biggs said. “Not having that free-market choice is generally negative, but we gain a much larger pool.”

Clayton pays 100 percent of premiums for employees, and it offers a $50 monthly subsidy for one dependent and a $100 subsidy for family plans. Of the 153 workers who receive their health insurance through the town, 20 took the family plan this year and are expected to save $2,000 annually with the switch to the state plan. Clayton officials aren’t sure what the the town’s savings will be after the switch, because not every employee opted into the town’s health plan, and some could switch.

“The savings could be in the hundreds of thousands,” Biggs said at the council meeting.

Connie Sorrell, Benson’s town clerk, said the switch would save her town about 25 percent, or $62,000 annually, over current premiums.

The state plan won’t be open to local government retirees receiving full benefits; in Clayton, that means workers who put in 20 or more years with the town. For those people, the town will pay half of their premiums under an Affordable Care Act plan.

Because Benson passed its resolution at its October meeting, its employees will make the switch on Jan. 1, 2016. Clayton’s participation in the plan will begin next Feb. 1.

If the 10,000-participant cap appears arbitrary, it is and it isn’t. Sen. Brent Jackson, whose district includes a portion of Johnston County, co-sponsored Senate Bill 479 bill, which went nowhere, but an identical bill in the house, HB154, passed and achieved the same result.

Jackson said the bills were drafted to supercede more specialized legislation that would have opened the state health plan to specific localities. Before this year’s General Assembly session, employees of Montgomery County and the towns of Elizabethtown and Matthews were covered by the state health plan. The 10,000 figure is the number the state arbitrarily used when trying to determine how many local government employees could join the plan without increasing costs. Jackson said lifting that cap would likely trigger another study to determine if state costs would rise.

This past week, the Selma and Smithfield town councils also supported pursuing the state’s health plan, though they took no formal action. Brad Young, a spokesman for the State Treasurer’s Office, said that based on requests from local governments, enrollment could reach 9,600 in the next couple months.

Drew Jackson: 919-553-7234, Ext. 104; @jdrewjackson

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