One of Augusta’s most valued employee benefits — its generous health insurance coverage — could be getting more expensive.
The Augusta Commission is set to vote Tuesday to raise employee health insurance premiums for the first time since 2018, increase hospital deductibles and lay the groundwork for additional changes in coming years.
The concern came to light when employee health insurance costs exceeded budget this year by over $7 million, contributing to an $11 million deficit the city is paying from reserves. In the coming year, officials predict a $5 million insurance shortfall feeding into an overall projected deficit of some $21 million.
Interim Finance Director Timothy Schroer’s plan would raise premiums gradually over four years, with further adjustments possible if costs keep climbing. Hospital deductibles would rise from $300 to $500, or $1,500 per family.
Employees making under $50,000 would see the smallest increases, while those earning over $100,000 would pay the most. About 75% of workers are enrolled in the plan, including 583 with family coverage.
For the lowest-paid worker earning about $31,000, single coverage would rise about $170 annually. Most employees are still expected to see a net pay bump from a budgeted 3% cost-of-living raise.
Augusta’s plan remains among the most generous in the state. Even with higher deductibles, it will still trail other governments — $2,000 in Columbus, $1,750 in Athens, and $5,000 in Henry County. Officials say the plan’s affordability helps retain staff.
“Having good insurance and a wellness clinic eliminates the need for employees to go to the ER,” Schroer said. “If we save two strokes or two heart attacks a year, it’s worth it.”
But Mayor Pro Tem Wayne Guilfoyle warned costs are unsustainable. “It’s gone up $17 million since 2018,” he said. “We’re self-insured. It’s not working.”
Augusta adopted a self-insured plan in 2012, when costs were about $20 million. Premiums and deductibles have only been raised once, in 2018, when claims hit $30 million. They reached $38 million in 2022 and $47 million this year.
Guilfoyle floated raising employee contributions to 40% but said higher deductibles might better control costs. The city currently covers about 78% of expenses, with workers paying 22%.
Mayor Garnett Johnson suggested high-deductible plans or re-bidding the city’s third-party administrator contract. EPIC, hired in 2020, currently manages the plan and advised against high-deductible plans for the city’s aging workforce.
With open enrollment starting Nov. 1, time is short for deeper structural changes, Schroer said, though the city could later examine plan types or cost-sharing models.
The commission will vote on the increases at its 2 p.m. Tuesday meeting, following a 1 p.m. closed-door session.
Other business going before the commission includes adopting Augusta Tomorrow’s 2035 Vision: A Blueprint for Action and Growth, eight planning petitions and public comments from 10 speakers, four on the city’s charter review.
