City manager to negotiate municipality healthcare coverage


By Dean Wright - deanwright@aimmediamidwest.com



GALLIPOLIS — Gallipolis City Commission voted Tuesday evening to give City Manager Gene Greene the authority to negotiate health insurance concerns after controversy in July which would have potentially left city employees without health coverage.

City Commissioners then voted for an option that would provide their employees with continued coverage over the summer during an emergency meeting where the city examined its legal choices as recent changes with healthcare contracts could have resulted in a coverage lapse.

As explained by City Solicitor Adam Salisbury and according to previous information, municipalities, school districts and other regional government institutions joined together to form a consortium called the Ohio Public Entity Consortium Healthcare Cooperative (OPEC-HC) and formed an agreement among all the various groups.

“The reason we joined with everyone else was because we wanted a better rating for our health insurance,” said Salisbury. “We only have around 40 employees on health insurance. That’s a relatively small number. So, to get a better rating, we joined together with everybody else. Now, we have thousands of employees rated together rather than just our 40.”

Salisbury said the city entered into the contract a few years ago and locked into rates based on the rates of the time.

“While everyone else’s health insurance has gone up (more significantly), ours has gone up maybe 10 to 15 percent a year because we locked in the rates,” said Salisbury. “Our consortium, OPEC, made a contract through its board of directors with Jefferson Health Plan. They are what are called our plan administrator…They are the administrator that then contracts with all the separate insurance companies like Medical Mutual.”

Gallipolis employees specifically had health benefits connected to Medical Mutual, according to city commission meeting information.

Salisbury said contracts existed between each of the various entities. A dispute has arisen between Jefferson Health Plan and OPEC.

“On Monday the 26 (of June), the board of directors for OPEC met and apparently decided to terminate the contract with Jefferson Health Plan and hire a new plan administrator with different insurance contracts, meaning the new plan administrator is not on the same contract with Medical Mutual and our other insurance carriers,” said Salisbury. “The city employees would be transferred away from Medical Mutual and we would have had new health insurance providers.”

According to the meeting, officials said Jefferson Health Plan was arguing that its contract with OPEC-HC had been terminated unlawfully because OPEC-HC had failed to give termination notice in a satisfactory way.

“It may or may not be true,” said Salisbury. “It’s going to likely be the subject of litigation for a long time.”

Jefferson Health Plan reportedly offered to the city that if it wanted to maintain its previous insurance terms with Medical Mutual, the organization would offer to make such an arrangement. Therefore, the city would no longer be paying OPEC-HC and would deal with Jefferson Health Plan directly.

City Commissioner Roger Brandeberry along with the other commissioners voted to go along with the Jefferson Health Plan option. They did this because of potential lag in coverage time where the city would reportedly be on the hook for several thousands of dollars in employee health insurance claims that were not going to be paid because Jefferson Health Plan refused to pay medical bills due to the claim that OPEC-HC had failed to meet its obligations as part of the agreement between the two organizations.

According to the solicitor, because Jefferson Health Plan believed that OPEC-HC had terminated unlawfully, the administrator was going to refuse to pay run-out claims, claims for services that had been incurred but not yet billed. The new insurance carrier that OPEC-HC reportedly signed for the city would not start coverage until July 1 and would not be paying previous claims.

“We were looking at a lapse in coverage for our employees and potential liability,” said Salisbury. “If the employee had been paying their health insurance and suddenly their health insurance is not working, they’re going to look to recover that from somebody and the city would have put itself up to liability by having the lapse in coverage.”

The city will still have to pay around $155,000 in deficits incurred for being part of the OPEC-HC, which it would have to pay regardless. The city is also potentially open to paying a $198,000 penalty by breaking with the OPEC-HC agreement. City commissioners asked whether they would be held to that number though when OPEC-HC may have potentially and previously broken its arrangements. The solicitor and attending insurance agents Scott and John Saunders said that was uncertain. The solicitor said the city would likely argue that if OPEC-HC had broken its arrangements with Jefferson Health Plan, the city had to continue providing healthcare coverage for its employees with no lapse and, therefore, should not be held to a broken agreement.

Dean Wright can be reached at 740-446-2342, ext. 2103.

By Dean Wright

deanwright@aimmediamidwest.com