The Tribune Democrat, Johnstown, PA

October 11, 2012

Despite protests, county hires health-care consultant

Sandra K Reabuck

EBENSBURG — Over employee protests, Cambria County’s two Republican commissioners approved a $100,000-a-year agreement with a health-care consulting company that says it can assure a $300,000 savings next year in health-care costs.

Thomas Chernisky, the Democratic minority commissioner on the three-member board, cast a dissenting vote after his motion failed to table the agreement until other proposals could be heard and reviewed by the county’s health-care committee.

Protesting the agreement were members of the health-care committee –  made up of 18 union  employees and Brian Beppler, the county’s human resources director. The committee has saved the county millions of dollars in health-care coverage over several years while doing the same job – at no cost – as the consultant would do, Patricia Moore, a member, said.

The agreement, which is effective Nov. 1,  is with Gallagher Benefit Services Inc., a subsidiary of Arthur J. Gallagher & Co. The parent company, which merged with the former Gleason Agency of Johnstown last year, was retained as Cambria’s insurance broker last year, also by the same 2-1 vote.

Christopher Gleason Jr., Gallagher area vice president, said that the anticipated increase in cost in the county’s health-care coverage is expected to go up as much as 13.5 percent, although Beppler said it might be 8 percent.

Cambria is a self-insured county and has a plan through UPMC. Its health-care cost this year is about $11 million.

President Commissioner Douglas Lengenfelder said Cambria will end up with a $200,000 net savings after paying Gallagher the $100,000 fee in the first year. If Gallagher fails to deliver on the savings, there will be reductions in its fee.

Moore, an assistant public defender, disputed whether the memorandum of understanding with Gallagher does provide the “outs” that Lengenfelder described.

The committee has saved Cambria $4.27 million in health-care costs since 2007, she said. Between 2009 and 2011, the savings have been

$1 million a year as the committee explored options and looked at employee incentives to cut costs, she said.

To retain the consultant, Moore said, “is a waste of money. We’re already doing that in the committee. We’re absolutely and totally against this.”

The concern is that employee benefits will be cut or their costs will go up, said John Hitchings, business agent with Service Employees International Union. The union represents seven employee groups in the county.

Chernisky said that the commissioners should have had the Gallagher’s proposal reviewed fully by the health-care committee. Moore said that the committee first became involved two days before Thursday’s meeting.

Commissioner Mark Wissinger and Lengenfelder said that the move is another attempt by the commissioners to find ways to cut costs and save jobs. Chernisky, while agreeing with those goals, said that it would make sense to look at alternative proposals.

When a question was raised where the commissioners would find the money to pay the $100,000, Controller Ed Cernic Jr. said he was unsure of that because of questions about the legality of the commissioners’ suggestion it come out of the health-care reserves.

But Moore said the reserve can be used to pay for the premiums and administrative fees, not for a consultant.

Lengenfelder, insisting that the committee is not being ignored, said “This could be a great opportunity for success. There is a guarantee from Gallagher of a savings of $300,000. If at any time we’re not happy (with Gallagher), we can give 30 days’ notice. We can walk away.”

While Chernisky asked his fellow commissioners not to rush into approving the agreement, Lengenfelder said, “It would be irresponsible to walk away and say we don’t want this. This isn’t a matter of blocking anybody out.”

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