How the City of Decorah handles city employee health insurance coverage

Should the City of Decorah change the way it handles health insurance for its employees?  Health insurance coverage for employees is one of the items the City of Decorah negotiates with its employee union.  The city and the union are currently in the second year of a three-year contract.

The contract between the City and Union calls for a $250 per year deductible on a single policy or a $500 per year deductible on a family policy.  However, the City has a health insurance policy with Wellmark Blue Cross/Blue Shield with a deductible of $2,000 per year for individuals and $4,000 per year for families.  The City takes the savings on the health insurance policies with higher deductibles and uses that money to self-insure the difference. 

The additional payments the City makes on health insurance claims are significantly lower than the money they would spend on health insurance premiums with lower deductibles on a Wellmark Blue Cross/Blue Shield policy.  City officials estimate this plan has saved the city $585,834 since 2009 alone—and the City has been using the system for around 25 years.