City officials are prudently revisiting their decision to go self-insured for employee health insurance five years ago, as the savings the city hoped to gain with the move never materialized, and the city has had to bail out the program to the tune of half a million dollars.
If Ashland city employees eventually wind up with higher deductibles and copays, as seems likely, that will be unfortunate for them, but they cannot expect to continue receiving better coverage than employees of comparable cities.
In 2013, it looked like a good deal for the city to eliminate an insurance company middleman to avoid a 10 percent increase in costs. As it turned out, the self-insurance program ran a deficit every year. Not only was the city forced to loan $500,000 to keep the system afloat, it was left without a health care reserve fund.
The move to contract once again with City County Insurance Services will save $1 million in lower premiums and help rebuild the reserve fund.
After 18 months, city employees’ coverage will more closely resemble that enjoyed by other city and county employees in Oregon. Ashland employees currently pay 5 percent of their premiums, with the city picking up 95 percent. That’s a remarkable benefit, as most employees in the private sector could tell them.
It’s fine to treat workers well, but continuing to subsidize better benefits than most other public employees enjoy is not sustainable, especially when the city has to struggle to pay for vital services.