When Walworth County makes employee benefit decisions, it keeps the ripple effect in mind.
For a governmental unit, the ripples start with the employees that it wants to recruit and retain. Those employees typically place a high value on access to health care.
But the ripples extend outward to impact all the taxpayers who live in Walworth County, located on the southern Wisconsin border.
“We have additional fiscal responsibility because portions of our labor force expenses are paid by our constituents,” said Lisa Henke, Risk/Benefits Manager for Walworth County Human Resources.
The Business Impact
Among those taxpayers, the impact on property owners is particularly important. Businesses pay a share of those taxes. Imposing a high tax burden on business can weaken the entire community by making it harder to build and maintain a tax base.
Walworth County is sensitive to how costs ripple into the community to impact businesses and their labor force.
“We have to remember to be cognizant of how our health plan design may affect constituents who are local business owners in the health care industry so we do not negatively impact them,” Henke said.
Adding The Alliance
Henke learned about The Alliance when she worked at a previous employer. When she moved to working for Walworth County in 2014, she worked with the county’s broker and Human Resources team to evaluate how joining The Alliance would benefit employees and taxpayers alike.
Because portions of Walworth County extend beyond The Alliance service area, Walworth County allows its 996 employees and qualifying retirees to choose between The Alliance and a second network.
“I saw great value in all the employer educational opportunities that were offered as well as the growth and benefits of the network over the last several years,” Henke said. “In 2017, I joined the Board of Directors because I enjoy giving back to my profession and find value in what The Alliance offers. I wanted to help grow this great organization.”
For employees, Alliance advantages include employee education opportunities, discounts at in-network providers and transparency tools.
“We are a 24/7 operation so having a network with a user-friendly website to answer questions when the Human Resources team is not available is important,” Henke added.
Analyzing Cadillac Tax Impact
Walworth County has worked to refine its benefit program to prepare for the possibility of the Affordable Care Act’s 40 percent excise tax, also known as the Cadillac Tax. The 40 percent tax is applied to the value of employer-sponsored health coverage that exceeds certain benefit thresholds. Congress has delayed the implementation of this tax to 2022.
“Annually we continue to review the design of our plan with co-pays and deductibles for our traditional plan as well as deductibles and co-insurance for our high deductible health plan,” Henke said.
“Over the last few years we have increased the deductible, co-pays and co-insurance for our traditional plan. This past year we saw increased participation in our high deductible health plan, which lowers our exposure to the Cadillac Tax. Our increased participation came from additional education sessions on the benefits of high deductible health plans and health savings accounts (HSAs) with an employer contribution that covers almost half of the initial deductible.”
Henke said Walworth County will keep the changes made to date “because they help make the participant a better consumer of health care.”
Walworth County continues to evaluate how additional plan changes could be made in the future to reduce the risk of owing the Cadillac Tax. Benefit options that were analyzed in recent years include:
- Narrow network, which limits access to providers, typically in exchange for greater discounts.
- Spousal carveout, which restricts how employees’ spouses can access the benefit plan, typically by requiring them to take benefits offered by their own employer when available.
- Pharmacy benefit management to look for options for greater savings on prescription medications.
- Retiree coverage carve out, which coordinates the employee health benefit plan with Medicare benefits by calculating what the employer plan would pay for the claim, and then reducing the payment by the amount that will be paid by Medicare.
A No-Tax Wellness Initiative
Walworth County also keeps taxpayers in mind when designing its wellness program.
“Because we are a public entity we do not use any taxpayer dollars to fund our employee wellness initiatives,” Henke said.
Instead, employees volunteer to organize the Get Fit 5K trail run/walk to raise funding for wellness activities. The 2018 event will be held May 19 at the Kettle Moraine State Park – Southern Unit, Nordic Trails. Advance registration is $20 for walkers and $25 for runners and increases $5 for each group after May 11.
“By doing this event we are able to offer prizes for participation and awards to winning participants and teams in each of our challenges,” Henke said. “We use these funds to provide employee ‘lunch and learns’ on various wellness topics throughout the year.”
Working with Public Employers
Henke cited four elements of The Alliance that other public employers can use to strengthen their benefit program:
- Discounts with providers
- Education events for the public employer’s executive leaders and human resources staff
- Employee education classes
- Efforts to improve health care transparency by providing information about costs and data about health care usage
“It’s a great option for public employers to consider,” Henke said.