Effective Jan. 1, 2015, Pine Bluff city employees and their families will be insured by Arkansas Blue Cross-Blue Shield, saving the city and non-traditional families money, but raising rates for two-parent-plus-children households.

Effective Jan. 1, 2015, Pine Bluff city employees and their families will be insured by Arkansas Blue Cross-Blue Shield, saving the city and non-traditional families money, but raising rates for two-parent-plus-children households.


The Pine Bluff City Council Administration Committee voted 2-1 to leave QualChoice — city employee insurer for the past seven years — and move to Blue Cross after determining that it offered the most substantial savings.


Committee Chairman George Stepps and committee member Wayne Easterly voted for the switch while committee member Lloyd Holcomb Jr. voted against it.


"I feel that we should have stayed with QualChoice," Holcomb said.


The city is also moving from a two-tier benefits structure to a four-tier system after city auditor Gina Devers found that employee-only coverage was priced disproportionately higher than coverage for families.


"By moving to a four-tier system, we are able to provide savings to employees who have insurance for just themselves, themselves and a spouse and themselves and children," Devers said.


Devers said that the city will pay 100 percent of the premium for employee-only coverage under the new plan. Under the existing two-tier plan with QualChoice, the premium for employee-only coverage is $35.62 per pay period.


Data provided by Blue Cross showed that under its base plan with a $2,000 deductible, an employee and their spouse will pay $164 per pay period for coverage. Data provided by the city finance department showed that an employee and their spouse currently pay $155.14 per pay period.


Under Blue Cross, an employee and their children will pay $68 per pay period for coverage, while at present the same family is paying $155.14 per pay period.


While employees with a spouse and children are paying $155.14 per pay period at present, under the Blue Cross structure, that family will pay $293 per pay period.


Numbers for the premium plan with a $1,000 deductible will be $9 per pay period for employee-only coverage; $180 per pay period for employee plus spouse coverage; $79 for employee plus children coverage and $292 for family coverage.


Under the existing QualChoice premium plan, employee-only coverage is $51.66 per pay period; and family coverage is $222.05 per pay period.


Blue Cross account executive Johnny Reynolds along with colleagues Brian Dorothy and George Burks spoke with the committee prior to the vote to give one final pitch for the city’s business.


Representatives of QualChoice and United Healthcare were also given time to make their best case.


"None of these other companies can say that they have an office here in Pine Bluff," Reynolds said. "We have 16 employees including two case officers ready to assist our members."


Reynolds said that Arkansas Blue Cross was the only insurance carrier in the state to offer a plan as part of the expanded Medicaid plan popularly known as the private option.


"There are almost 6,000 Jefferson County residents who have insurance under our plan today who did not have it last year," Reynolds said. "This is just one example of our commitment to the people of this area."


Insurance broker Ben Trevino with First Arkansas Insurance was contracted by the city to select the most competitive insurance carriers.


Trevino first brought representatives of the three carriers together with the administration committee on Thursday but it was decided that extra time would be given to the carriers to present revised offers.


Broker fee


Trevino was asked to speak to the committee regarding confusion over whether the city owed him a fee.


"Now I thought we were told that any fees due to you would be paid for by the insurance carriers themselves," Stepps said.


Trevino said that he had asked the three carriers to prepare quotes that did not include a broker’s commission.


Trevino said that he spoke with his colleagues at First Arkansas and determined that he would ask for a $30,000 commission. Trevino said that one of the carriers normally pays a 3 percent commission to brokers while the other two pay 1.5 percent commissions.


"This is below anything that we would have received as part of the standard commissions paid by the carriers," Trevino said. "So this is saving the city money as well."


City Attorney Althea Hadden-Scott said that she was concerned that the proper steps might not have been followed.


"Normally, we would seek competitive bids from various insurance brokers and then, after selecting the low bid, we would have it voted on by the city council," Hadden-Scott said. "That wasn’t done here."


The committee agreed to look into the issue at a later meeting.