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Local officials brace for rising fees from health care act

Published: Saturday, Aug. 24, 2013 5:30 a.m. CDT • Updated: Saturday, Aug. 24, 2013 11:50 p.m. CDT

The DeKalb County government might have to come up with an extra $200,000 next year to cover the cost of health insurance for its employees.

Peter Stefan, the county finance director, says provisions of the Affordable Care Act will increase health insurance costs for the county by about 4 percent for the 307 employees who receive it. The county pays 75 percent of its employees health insurance premiums. With the increased fees, those percentages may rise.

“Is it worth it? How many more people will have insurance? Is that a reasonable cost?” Stefan said. “Everyone is going to have a different opinion on that.”

The Affordable Care Act, signed in 2010 with provisions being phased in through 2020, is meant to make health care more accessible and affordable for all Americans. It requires all Americans to have insurance and all businesses with more than 50 employees to offer it or pay a fine. 

That includes local governments and schools. Government officials around DeKalb County still are gathering information on how the Affordable Care Act will affect them, but several of them know they will have to pay additional fees to fund research for treating diseases and paying a portion of the cost for people with large health insurance claims. 

Under the Patient-Centered Outcomes Research Institute fee, state and local governments will have to pay either $1 or $2 a covered person until 2019. They will also pay $63 a covered person under the Transitional Reinsurance Fee from 2014 to 2016. The fee will be reduced each year until it expires.

Stefan said the county expects to pay $5.4 million in health insurance premiums this year. As of August, they’ve spent $3.5 million. Of the 671 employees within the county, 501 are authorized and budgeted to receive health insurance. Of those employees, 453 of them are eligible for it. Only 307 employees use it.

The city of Sycamore expects its health insurance costs to face a 4 percent increase in administrative fees next year associated with the ACA, Sycamore City Manager Brian Gregory said.

The city, which pays about $2 million in health insurance premiums annually, received a 3.8 percent decrease in its renewal rate for premiums this year, but the administrative fees next year will erase that. Gregory said the city may have to pay an additional $80,000 for health insurance.

The city is in good position to shoulder the costs because of its good insurance claims history, he said.

“We are fortunate we’ve had a good experience, which helps make this more manageable,” Gregory said.

Sycamore has 101 full-time employees, of which 98 use one of the city’s three insurance plans, said Adam Orton, Sycamore assistant city manager and treasurer. The city pays all of its employees health insurance premiums, he said. 

The DeKalb School District 428 also expects to pay fees related to the Affordable Care Act. The district predicts it will pay fees totaling $115,000. The district is currently looking for a way to close its $2.7 million budget deficit. The district has projected revenue of about $69 million and expenditures of about $72 million. 

Rudy Espiritu, DeKalb interim city manager, said the city employs about 200 people, who all use the health insurance plan offered. He said the city is required by union contracts to offer health insurance for employees. 

Espiritu said he wasn’t certain what the impact of the ACA will be on the city. 

“It’s something the city is monitoring and it’s kind of evolving day by day,” Espiritu said.

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