The York County Board of Supervisors continued to discuss the budget at a work session Tuesday, focusing their attention on employee benefits and compensation.
The county is looking at an increase of $400,000 in health insurance costs for its employees and an additional $2.6 million in healthcare costs for school division employees. The proposed budget of $131.2 million would address these increased healthcare costs with an increase in the real estate tax rate of 2.3 cents, setting the rate to 76.45 cents per $100 of assessed value.
A presentation during the work session looked at a number of ways the county has tried to reduce its healthcare expenses, including passing more cost to the employees, putting the health insurance plan out for bid and educating employees on less expensive options, such as generic prescription drugs rather than name brands. The supervisors discussed the importance of having a competitive health insurance plan for the purposes of luring talent to work for the county.
The county uses a self-insurance system that has the county act as its own insurer. The distinction between self-insurance and full-insurance isn’t one that affects the level of benefits a member of the program receives. While a full-insurance policy would require the county to pay a health insurance company to address employee claims, the self-insurance policy allows the county to reduce overhead and pay out those claims without using a health insurance company’s coffers. The program is managed by Anthem.
About 80 to 85 percent of the cost of the program is due to claims, 5 percent for insurance for catastrophic claims and the rest is for administrative costs, according to John Newby, president of Commercial Risk Consultants. His firm provides insurance consulting to the county. Chesapeake and Norfolk are the only localities in the area that don’t use a self-insurance plan, and Norfolk is projected to switch to one within the year.
At a previous work session, Chairman Walt Zaremba asked County Administrator James McReynolds to examine what it would cost the county to offer a 5 percent pay increase instead of the 2 percent increase featured in the proposed budget. County employees have not had a raise in four years.
McReynolds presented those numbers, explaining to the supervisors that a 5 percent raise for both county and school division employees would result in an additional $3.3 million in expenses. To cover that, the supervisors would have to raise the real estate tax by 6.15 cents instead of the proposed 2.3 cents.
The supervisors will hold a regular meeting 6 p.m. April 16 at York Hall. Their next discussion of the budget will be at an April 23 work session, followed by the April 25 public hearing at York Hall. The public hearing starts at 7 p.m. at York Hall.
