Wednesday, February 18, 2015


So the city of Quincy is going from being self-insured to actually purchasing insurance.

The difference, as you probably know is that, in self-insurance, the city maintains a pile of money and then hires a third party administrator to handle claims from that pile of money.  When the city pays that money into the "pile" or city retirees pay money (their own premiums) into that "pile" it goes into a segregated fund, a dedicated account under the control of the City.

Now, the City is going to stop that and simply pay premiums (and have the retirees pay premiums) to an actual insurance company.  So the city won't be maintaining that pile of money anymore.  When the self-insurance winds down, there will almost certainly be several hundred thousand dollars in the "pile" after all the claims are paid.

So where will the pile go?  Will we see a big deposit into the general fund?  Will it be redistributed out to the member of the plan who paid premiums to offset premium payments for the new insurance?  Or maybe for a little Downton Abbey redecorating?  I hear that's hot now.

Of one thing we can be sure of.  This administration will be as transparent about this as it was with the information regarding the bid specs on the employee health plan recently.  In other words.....Close your eyes.  What do you see?

Be on the lookout for that pile.


At 11:25 AM, February 18, 2015, Blogger T. Scott Galloway said...

Is it common for cities in IL NOT to self-insure. It isn't in Michigan. I'm sure some do, but I've never heard of it. Looks like a smoke and mirrors approach to improving the municipal "balance sheet"

At 11:33 AM, April 13, 2015, Anonymous Anonymous said...

Interesting Blog. Except the City has not switched from Self-Insured to Fully Insured. The only thing the city did was change who would be playing claims. It was IPMG not it will be BCBS. The bottomline, the City stayed self-funded and potentially saving dollars for its employees and the city's budget.

At 4:29 PM, May 06, 2015, Blogger UMRBlog said...

Anon 4/13,

Thank you for coming by. I now know you're correct but I was relying on the Mayor's own words, on TV and in the Newspaper. "Going from Self-Insured to Blue Cross."

I've always contended that the City needed a PIO and every time he opens his mouth he makes my point.


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