By Matt Ward —
Numerous large claims on the City of Fredericksburg’s self-funded health insurance plan have left the account at risk of deficit, though a report to the Fredericksburg City Council Monday advised that the fund should be in good shape for the next several months.
“Our experience over the past 10-15 years has been positive with this self-insurance fund,” City Manager Kent Myers said. “But here within the last 12 months, we’ve somehow received a total of 12 large catastrophic claims (approaching $70,000).”
Effective March 1, the city will move to a more cost-effective provider network, which will reduce some benefits such as office visit requirements and changes to prescription policy. The move is expected to save the city $163,000 this year.
The current budget includes a 15-percent increase in city funding for health insurance, effective Oct. 1, and a 10-percent increase in dependent insurance, effective April 1.
While the council agreed that further reducing coverage was not a realistic option, council members were divided on whether additional funding should come from increased dependent coverage charges or a mandatory employee contribution.
“I can see putting $100,000 into that account to help cover that, but I do think that we need to ask the employees to put in some,” Councilman Jerry Luckenbach said.
Currently, city employees contribute no funds to individual insurance.
“Eventually, dependent health care should be self-sustaining,” Councilman Graham Pearson said. “I think we should cover 100 percent of our employees and I think for dependents, the employees should cover the actual cost. Because you have two employees in the same organization and the same rate of pay, we’re going to be subsidizing one more than the other if one has a family and the other doesn’t.”
The council voted to allocate an additional $100,000 from various city departments to the health insurance fund and will re-examine the issue following the release of the city’s mid-year budget report due out by the end of April.
“If we were going to change anything, I’d be in favor of considering employee contributions rather than going up on dependents at this point,” Councilman Gary Neffendorf said. “That will generate more dollars for the pool than just going up on dependents.”
Affordable housing
Plans are moving forward for a new affordable housing development adjacent to American Bank of Texas on North Llano Street, following council action Monday.
The city approved rezoning 7.3 acres of land from R-1 single family residential to C-2 commercial and R-3 multi-family residential, opening the door for Kerrville-based MacDonald and Associates, Inc. to begin developing the Rolling Hills Apartments complex.
Split into two phases, the complex would begin with an 80-unit complex facing Adams Street, of which 72 units would be set aside for lower-income individuals and families. A second 96-unit conventional market rate complex adjacent to the affordable housing development would come later, according to developer Justin MacDonald.
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