City Administrator Adam Sonntag talks about the thought process behind the city moving to join the state health plan as Mayor Ted Grant listens.

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City Administrator Adam Sonntag talks about the thought process behind the city moving to join the state health plan as Mayor Ted Grant listens.

The city of Ripon is taking steps to join the state’s insurance provider, which could save the city money in the long term.

The Ripon Common Council unanimously approved a resolution last week Monday to be included in the Wisconsin Public Employers’ Group Health Insurance Program, which is used by state agencies — such as the DNR — and other Wisconsin municipalities.

City Administrator Adam Sonntag said Ripon had to scramble at the last minute to find a new insurance provider last November, when its provider at the time planned to raise insurance premiums by 49%.

However, many providers declined to even give the city of Ripon a rate estimate because of the general risk of its employee population.

“​​We were in a bad spot to the point where we had to move to the current plan we’re at, which is going well; the plan ended up being designed very well,” he said. “But we are trying to avoid this constant pressure of increases.”

The city estimates a 10% increase in premiums for the coming year on the current plan, but the increase could be as much as 23%.

“We have no idea and we won’t know for a while,” Sonntag said. “... We were able to learn from last year and better prepare.”

That’s why the city is looking into potentially joining the state health plan, which is a six-month process.

In order to qualify for the program, 65% of the city’s eligible employees must participate in the state health plan, Sonntag noted.

That means the city needs 42 of its 64 eligible employees to enroll in the program. It currently has 40 employees enrolled.

Although the city currently is “a little short” of the 65% mark, Sonntag believes it could reach that number through increased education and communication with employees.

The Common Council essentially selected a health program through the state insurance provider, so the next step is enrolling employees to reach the 65% threshold.

“Around Nov. 1, we will have a good idea of where we stand for coverage effective the first of the year,” Sonntag said.

The state health plan covers state employees and local governments that choose to join, with the idea of having a larger pool of people to spread insurance risk over, the city administrator noted.

However, because the city’s risk is quite high due to a few “high-cost claims,” the city will face a surcharge the first few years on the plan.

For the first year, the city will pay 40% for single and family plans. In the second year, the surcharge will be cut in half. And in year three, it will go away.

“For the first time ever, we’ll probably see a reduction of health-care costs,” Sonntag said.

The city administrator presented four program options for the Common Council to select last week Monday, with the city’s total savings ranging from $13,000 to $69,000.

The Common Council selected the plan with roughly $69,000 in savings. Sonntag said the state health plan would have an 88/12 split in terms of the premium share between city and employees, with employees covering 12%.

Under the state program, Mayor Ted Grant said premiums would be more expensive, but is a better plan.

“It may save you money overall, especially if you go to the doctor regularly,” he said.

Sonntag noted the city’s employee review board, composed of individuals from each department, was notified that the city was looking at joining the state health plan.

The goal of joining the state health plan is to normalize the amount insurance premiums go up each year for the city to avoid major fluctuations that cause last-minute changes.

That’s because the state health plan generally increases between 5% to 8% each year, whereas private plans can fluctuate between 10% and 49%, the Sonntag said.

Most of the time, when municipalities join the state health plan, they stay for a long time because there is a penalty for leaving.

“If you leave, you can’t rejoin for three years, so you have to ensure that, if you leave, you better be doing it for a really good deal,” Sonntag said. “Because you could be back to playing the game of chasing the next best plan if you see large increases.”

While the state health plan once was viewed as an expensive plan, it’s now much safer for municipalities than the private insurance market.

“It has become a far more viable option for municipalities,” Sonntag said. “Frankly, we should have been here a decade ago.”

He added that joining the state health plan would enable the city to provide insurance to more employees at a lower cost.

“We went from last year trying to shed people to this year trying to get them back,” Sonntag said. “That sounds bad, but with this plan, the light at the end of the tunnel is that even by adding people, we are getting ahead. On the other side of things, we need to shed people because it’s just costing way too much.”

The Common Council could opt to rescind the resolution to join the state health plan, if the city can find a better program or not enough employees agree to participate.

Joe Schulz served as the reporter of the Green Laker in 2019 and 2020, before being hired as a reporter for the Commonwealth in October 2020. He is from Oshkosh and graduated from UW-Oshkosh in December 2020 with a bachelor's degree in journalism.

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