Oregon has joined the Buckeye Ohio Risk Management Association (BORMA), which jointly pools resources with other municipalities to provide health insurance and prescription coverage to its employees.
The city currently has 175 employees presently participating in its insurance program.
BORMA is a consortium of municipalities that have come together to evaluate, negotiate, purchase and maintain health insurance programs for their communities. A total of 1,200 active employees are insured under the BORMA health insurance plan.
Joining BORMA is an ongoing attempt by the city to provide the best and lowest cost options for health insurance to Oregon employees, Administrator Ken Filipiak said at a council meeting last Monday.
The city anticipates a 15 percent decrease in costs over Paramount Health Care’s bid it accepted last December, he said.
The city believes membership in a large insurance pool is likely to result in less volatile and lower overall annual increases in insurance coverage.
“It provides an opportunity, because of the strength of a large pool, to provide some stability over time and to be able to try and mitigate the significant and unpredictable large increases in health care from year to year,” said Filipiak.
“I think we all understand this is not a means by which we can avoid cost increases over time, but we believe it is a way to stabilize them to keep them more consistent by the strength of size and cost controls instituted both at the local level and the insurance pool,” said Filipiak. This allows us to switch from exclusively doing business with Paramount and the Promedica network to Medical Mutual of Ohio, which allows our employees open access to both Promedica and Mercy based facilities and independent based facilities, such as St. Lukes. It also provides some means by which the city can patronize some of the local health care providers, such as St. Charles, which we have been unable to do business with in recent years.”
Membership requires a three year minimum commitment from the city, during which insurance rates will be adjusted annually and equally for all members based on the performance pool.
Joining BORMA will result in an immediate lowering of premium costs for the remainder of the calendar year, beginning with an anticipated membership and coverage start date of June 1.
“This is a modified self-insured program which stands to support strong city savings, but yet deliver good services, continued high level quality services to all our employees,” said Councilman James Seaman, chairman of the Finance Committee, which recommended approval.
The city anticipates saving over $625,000 over the Paramount bid during the three year commitment.
BORMA is made up of 12 entities, according to Seaman.
“Many people have been in BORMA for a lengthy period of time,” said Seaman. “Their rates of increases are single digit. You can’t get away from increases in health insurance. But they are low single digit most of the time. We were initially presented with a 30 percent increase from Paramount, an unbelievable health care insurance increase of $800,000 to the city.”
“We are self-insured up to $125,000, BORMA will pick up the cost up to $125,000,”said Seaman. “We are re-insuranced anything over $125,000. We will also be setting money aside so that if we decide to leave after a two year and seven month period of time, we will have tail end monies to support any claims or premiums that would have been made before we might decide to switch to something else.”
Seaman said BORMA is a non-profit group. “That’s one of the reasons we get a strong deal for our employees,” he said.
Councilman Bill Myers said he was impressed by the 3 percent administration cost BORMA charges for running the program. “That’s extremely low. It shows they run a very tight ship,” he said.
Council President Mike Sheehy said the city’s unions are receptive to the change.
“There are significant savings to be had,’ said Sheehy. “It sounds like the care will be every bit as good if not better."