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Home My WebLink AboutR-1994-093 Self-InsuranceRESOLUTION NO. R-94- 93 A RESOLUTION regarding self-insurance and the local government option to self -fund health care benefits. AREAS, the State and Federal government are both considering legislation to require provision of certain health benefits for employees, and WHEREAS, the legislation does not specifically include or exclude self-funded local government health plans in Washington State, and WHEREAS, the City recognizes that health care reform at the State and/or national level in some form is inevitable, and WHEREAS, municipal sponsors of employee health care plans are neither specifically addressed under the Washington Health Services Act of 1993 nor Public Law 93-406 of the Employee Retirement Income Security Act of 1974 (ERISA), and WHEREAS, all cities in this State under RCW 48.62.011 are currently granted the exclusive source of local government entity authority to individually or jointly self -insure risks; and WHEREAS, the City desires to protect the cost, cash flow, participant education and wellness incentives that our self-insured plans now provides us, and WHEREAS, the City desires the option of continuing to self -fund (insure) our employee health care benefit plan and supports amending the Washington Health Services Act to allow local governments optional participation with Health Insurance Purchasing Cooperatives (HIPC) in this State, and PERS-HEALTH Health Resolution NOW, THEREFORE, be it resolved by the City Council of the City of Yakima as follows: lection l.. That the City support legislation to allow the continued option to self -insure employee benefit plans in the State of Washington in full compliance with Federal law. Section 2. That City staff may advocate this objective at both the State and Federal level, consistent with the City's experience as a self- funded entity and this resolution. ADOPTED BY THE CITY COUNCIL this 5th day of July. , 1994. ATTEST: Dhp PERS-HEALTH Health Resolution CITY CLERK MAYOR (I ATTACHMENT A A Resolution Regarding Refinements to Health Care Reform_ WHEREAS, The 1993 Washington State Legislature passed the comprehensive Washington Health Services Act, making sweeping changes in the structure and availability of health care intending to provide access to health care for all citizens in the state and to contain rising health care costs; and WHEREAS, The Act sets forth a structure that calls for all health insurance to be provided by a certified health plan (CHP), and requires employers and individuals to purchase coverage only from CHP's; and WHEREAS, The Health Services Act calls for health insurance premiums to be determined by community rating, which, if instituted in a pure form, will increase costs for city employers and employees; and WHEREAS, Cities must continue to provide full medical coverage to its retired LEOFF I employees and such coverage will likely exceed the scope of the Uniform Benefits Package; and WHEREAS, The new law does not explicitly address multi-employer association plans or selfinsu employers and these programs will lose some of their current advantages and authority; and WHEREAS, The Act transfers the governance of local public health services to counties effective July 1, 1995, replacing city contractual payments with funding from the cities' motor vehicle excise tax (2.95%) to county health departments based on population; and WHEREAS, The new law requires the Association of Washington Cities and the county associations to study the changes in the local public health governance and finance provisions and make recommendations to the legislature by March 1, 1994; and WHEREAS, The city and county associations established the Joint City and County Steering Committee on local public health that prepared a report for the legislature outlining preliminary recommendations for the governance and financing of.local public health; NOW, THEREFORE, BE IT RESOLVED, The Association will ask for the following clarifications and refinements to the Washington Health Services Act: a. Cities will be able to offer comprehensive, affordable coverage for their LEOFF I employees, including a guarantee of supplemental coverage designed to meet the needs of this group if necessary; and b. Allow local government multi-employer trust to retain their ability to offer sufficient and affordable health care coverage and to adopt a modified community rating scheme and other changes that will ensure a workable implementation of the Act; and c. Recognize and enable local government self-insured employers to retain the ability to self insure; BE IT FURTHER RESOLVED, The Association will support a recommendation on the governance and 11 financing of local public health agencies, provided it meets the principles of the Joint City and County Steering Committee on Local Public Health as articulated in the City and County Local Public Health Governance and Financing Report. ADOPTION OF THE FOREGOINj" OLUTION RECOMMENDED. Resolutions Committee C 0,-fr4:—Tac : cam• -- \ %� ATTACHMENT B Local Government Self -Insurance of Health and Welfare Benefit Plans Advantages/Issues 5 May 1994 Advantages 1. Management/Labor control of benefit plans and rates 2. Maintain control of existing and future plan reserves 3. The BEST vehicle for: • wellness incentives • preventive care initiatives • good data for plan management • encouraging personal responsibility • joint management/labor discussion of an important part of compensation • risk management approach to controlling benefit costs • providing high quality benefits and service at competitive costs Issues 1. Local government benefits not part of State budget 2. Need to compete with private sector - benefits a key part of ability to compete 3. Local government at a disadvantage if self -funding is taken away while private sector has this option 4. Responsibility for LEOFF I coverage is managed through many self-funded plans 5. Lower benefits or higher costs affect multiple collective bargaining agreements 6. Local government must operate within a fixed budget - loss of control of a significant cost item to a State controlled authority creates potential budget problems 7. Local government will have no effective voice on the Public Employees Benefit Board which controls the Healthcare Authority 8. RCW Chapter 48.62 "provides the exclusive source of local government entity authority to individually or jointly self -insure risks, jointly purchase insurance or reinsurance, and to contract for risk management, claims and administrative services" 9. Local government should not be forced into a State plan until it complies with any Federal reform that may pass or with existing Federal law SAFECO SAFECO LIFE INSURANCE COMPANY 15411 N.E. 51ST STREET REDMOND, WA 98052-5114 June 3, 1994 To: SAFECO Life Excess Loss Policyholders ATTACHMENT C TELEPHONE: (206) 867-8000 MAILING ADDRESS: P.O BOX 34690 SEATTLE, WA 981241690 It has been awhile since SAFECO Life has sent you any information regarding national. health care. We believe many of the clhanges being discussed both for medical care and its financing are positive. However, many members of Congress still believe that medical coverage must be fully insured for all but the largest employer groups (the definition of "large" varies greatly). They still have not grasped that over 65% of employer provided medical coverage in the U.S. uses self funding and that the vast majority of those employers think self funding works bettn_faillyjnmtecLcagrage. One comment that we have heard from several Senators and Representatives is that they have heard about the advantages of self funding from the insurance industry, the Self Insurance Institute of America (SIIA), the Society of Professional Benefit Administrators (SPBA) and from individual TPAs. But they have heard little from individual employers. This is surprising as many of the concepts still being discussed -- community rating, mandated benefit design, paying for 80% of the cost of medical coverage -- will raise medical plan costs for most companies. Therefore, we are writing this letter to encourage you to write your members of Congress and tell them your thoughts on health care. I know a number of you have written previously; however the congressional debate is now at its most critical phase,. The right to elf inure m„st b an rption far empinyers, regardless of size. Congress needs to hear this from the employer community. Thank you for becoming involved in this important debate that, regardless of outcome,, will impact ail Americans. Sincerely, 63 Pe -41 - Gregory W. Parker Assistant Vice President bja ATTACHMENT D SELF-INSURED AGENCIES & HEALTHCARE REFORM 5 May 1994 NEXT ACTION STEPS 1. Have our councils/boards adopt resolutions. 2. Send adopted resolutions to: AWC State Health Care Commission Congress State Insurance Commissioner Legislature State Risk Manager Note: Send copy to Redmond too. Redmond will serve as clearinghouse for adopted resolutions. 3. Review 48.62 applicability to your jurisdiction. (Can healthcare reform take away right to self -insure?) 4. Have follow-up meeting after, June AWC Conference. Possibly August. Include some knowledgeable "insider"? 5. Be available to support AWC in lobbying efforts. 6. Contact Labor Advisory Committee of Healthcare Commission seeking an opportunity to address the committee on the concerns of self-insured local governments. 7. Send information packets to other self-insured jurisdictions. 8. Next meeting - August 1994, date and time to be scheduled. o:Ncapoon*3on3573c