Kent County switches to health insurance trust

DOVER — Kent County Levy Court commissioners voted to switch the health insurance provider for its 302 employees from Highmark to Delaware Valley Health Trust (DVHT). Commissioners and county staff believe the trust will provide long-term stable pricing and a suite of wellness benefits that may end up reducing the number of total claims.

DVHT is a non-profit “risk-sharing” pool with approximately 130 public entity members. The trust claims to provides health coverage to over 20,000 employees and dependents.

Although not an apples to apples comparison because of the way the services are packaged, a Highmark proposal to the county for Financial Year 2019 estimated $4.2 million in costs to DVHT’s $4.5 million proposal.

Five commissioners voted in favor of the proposal with third district commissioner Allan Angel abstaining and second district commissioner James Hosfelt absent. Mr. Angel said he decided not to vote because of concerns about increased up-front costs.

“This is going to cost us $250,000 — $32,000 more to employees,” he said. “There’s also a possibility that it could cost another $110,000 on top of that, depending on how things play out. I’m not going to vote for it.”

While aware of the higher up-front costs, other commissioners dismissed this and noted that Highmark’s proposal was deliberately meant to “undercut” DVHT, which may offer county employees and taxpayers a better value longer term.

“Very clearly, Highmark played games,” said fourth district commissioner Eric Buckson. “Because we brought in competition this year, they undercut them one time to get us to blink and not go with DHVT. If we don’t make this move, Highmark is going to play with us next year again and shoot for the moon. This is a stable rate with a proven track record, and I wholeheartedly support it.”

Other commissioners pointed to county staff’s approval of the switch and wellness benefits DHVT has agreed to offer.

“They will offer us a wellness program that offers benefits back to the employees for taking better care of themselves which was one of my pushes,” said fifth district commissioner George “Jody” Sweeney. “I think that’s something our employees deserve. It does cost us a little bit more money this year, but it’s not going to cost as much as Highmark will next year because we are expecting healthcare costs to keep going up.”

County administrator Michael Petit deMange noted that moving employees health insurance needs over to a trust may help insulate the county from drastic cost increases that are often seen in the “private industry.”

“DVHT has been in existence for 19 years and over the course of that, they’ve had a very stable rate of increase compared to the private industry — on average, only about a 6 percent per year rate of increase,” he said. “Highmark knew they there was competition this year so they lowered their proposal, but in the absence of competition, we’re looking at 10 to 17 percent rate increases, depending on the year.”

Related the trust to the model the county currently uses to address Workers’ Compensation, Mr. Petit deMange also expects DVHT to save money for the county over time in the form of returned premiums.

“We’re a member of the Delaware Founders Insurance Trust that deals with our Workers’ Compensation,” he said. “They have a very robust safety training program and since it’s member-owned they return portions of premium on good claim years — it’s stabilized our costs significantly with Workers’ Compensation and we’re hoping for similar results with DVHT.”

Reach staff writer Ian Gronau at igronau@newszap.com

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