Des Moines opts back into self insurance program to cut costs

Des Moines InsuranceHealth insurance for city workers in Des Moines, Iowa, is becoming less expensive. Earlier this week, the City Council moved to make a switch back to a self-insurance system for its employee’s health plans. This is the first time since 2003 the city has opted to participate in such a system.

City officials hope that the change will help save money on policies across the board. They expect it will also save taxpayers money – to the tune of $1million annually.

The City Council is currently expanding their efforts to reduce operating costs throughout the city. As both health insurance rates and medical costs continue to rise steadily, the city is faced with sharp declines in profits. The Council is also considering lowering commercial property tax rates by as much as 40%.

Des Moines was self-insured for many years before 2003. Back then, the city was liable for the first $300,000 in claims before secondary insurance policies came in to cover the rest. Several large claims, followed by ample payouts, led the Council to opt for private insurance from Blue Cross Blue Shield of Iowa. Changes to the stop-gap have been made since 2003, and city officials believe now is the time to return to self-insurance.

The new system will begin July 1st and operate through June 3th, 2012. City workers will see no changes in their policies apart from premiums, which are expected to drop slightly.

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