Buoyed by the improved health of its employees, Pima County has decided to self-fund the health insurance it provides to workers.
That means the county, and not a commercial health insurance company, will directly pay employees' medical claims.
The move is part of an effort by the county to prevent its $40 million annual employee health-care-cost bill from rising, Pima County Human Resources Director Allyn Bulzomi explained.
"The whole idea is to get the best care at a cheap price for taxpayers," Bulzomi said. "Health-care costs in general don't seem to be going down, but we can keep ours from going up."
The county will take on full financial responsibility for its employees' health insurance, and is looking for a third-party vendor to administer the plan.
A "request for proposal" to seek a third-party administrator went out Oct. 23, and the deadline for interested parties is Nov. 26. The county hopes to begin open enrollment in May, Bulzomi said.
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Pima County has a workforce of 7,000, and about 5,500 of the employees are on the county's health insurance plan, which is currently provided by UnitedHealthcare.
Employees with health insurance have been making overall improvements in their health that have saved the county money in recent years. Among other things, there was a 5 percent decrease in complications among diabetics in the 2011 plan year; and emergency room visits, which cost an average $286 per visit, decreased by nearly 7 percent.
"Healthy employees are productive employees, so this is not just about lowering costs but ensuring better utilization of health care," Pima County Administrator Chuck Huckelberry said in a prepared statement.
Bulzomi said more than 80 percent of insured county employees took advantage of premium discounts for workers who don't use tobacco, who exercise and who complete health assessments and preventive screenings.
Traditionally, the county has contracted with an insurance carrier to provide employee health benefits, allowing that carrier to assume all of the risks or rewards. If caring for Pima County employees cost less than the premiums, the insurance provider made a profit.
Rather than make a profit, Bulzomi said now the county has an opportunity to save money. He noted that most counties in Arizona self-insure their health plans and that Maricopa County recently rebated its employees two months of premiums - a reward for keeping health costs in check.
"We're one of the last counties in the state to do this," Bulzomi said. "It's not that we don't want our employees to go to the doctor. We want them to go to the doctor and to stay healthy."
Bulzomi said so far he hasn't heard any complaints from employees. The change will be done with minimal disruption, he said. He doesn't anticipate the new federal health law having any effect on county employees' health plans.
Self-insurance has become increasingly popular in the U.S., the Kaiser Family Foundation says. Most workers at employers of 5,000 people or more are on self-funded plans, it says.
Contact reporter Stephanie Innes at sinnes@azstarnet.com or 573-4134.
