Co-op board studies increases to insurance coverage

Faced with an 18.2 percent increase for health insurance next year, the Socorro Electric Co-op board of trustees voted 10-1 Monday evening (Nov. 23) to go it alone instead of sticking with its current association plan.

 

 

Tom Frank and Jan Gibson with AON Consulting informed the board that after reviewing the situation and speaking with other co-ops in the group insurance pool, it was in the best interest of SEC to “stand alone” in their renewal of health insurance for employees, retirees and trustees.

Frank said that while Presbyterian was able to reduce that increase of 7.9 percent on the pool plan, when pressed for their best and final offer, the insurance company offered SEC a 4.2 percent increase in coverage.

“That is $31,000 more than you are currently paying, but it is $105,000 less than if you stayed with the association group plan,” Frank said. The consultant went on to say that the current plan offers in-network as well as out-of-network coverage, benefits that would continue under the new policy if the board opted for that plan.

On an inquiry by board member Charlie Wagner, Frank reported that if the co-op were no longer with the association plan there would be approximately 48 people utilizing the insurance plan through SEC — 12 with an individual plan and 36 with a family plan.

Wagner noted that over the past several years, the co-op has seen rate increases for insurance and cited an increase of 7 percent last year.

“Before that it was about 10 percent a year for the last 10 years,” he said.

Gibson said the increase two years ago was 9.7 percent.

Wagner continued, and said he would like the co-op to look into plans offered by the NRECA, or the National Rural Electric Cooperative Association.

“They cover 47 states and 900 co-ops,” he said. “Their plans have a higher deductible but that is a relatively small part of the overall expense of a serious illness or surgery that requires people to go out-of-state and out-of-network.”

Wagner then asked how much time it would take NRECA to work up and submit a competitive bid.

Co-op general manager Leopoldo Pineda said NRECA rates were set to increase 20 to 25 percent next year.

Pineda said other companies had expressed interest in bidding on the co-op’s health coverage but they required the release of health status information on those already receiving coverage or were unwilling to cover trustees or retirees. Wagner commented that he wasn’t sure if the co-op was required to cover insurance for the trustees, but definitely the retirees.

Later in the meeting, after making a motion to accept the Presbyterian plan, trustee Juan Gonzales pointed out that the only reason trustees had health insurance through the co-op was because the members gave those benefits to the trustees.

“They elected that the board of directors have insurance,” Gonzales said.

Still advocating for a competitive bid from NRECA, Wagner asked Frank and Gibson what the absolute drop-dead date was for the board to make a final decision. Although the insurance would take effect on Jan. 1, Gibson said if the board decided on Presbyterian, then Dec. 12 was the latest.

“They need to enter information and send out new insurance cards,” Gibson said.

Board president Paul Bustamante asked if Wagner was going to explain that he was “with” NRECA. Wagner conceded he had worked for NRECA for nine years and had 40 years of experience in the insurance industry.

Frank pointed out that approximately four co-ops in New Mexico still used NRECA for insurance.

“They are in eastern New Mexico and I believe they use them for access to care in West Texas, in Amarillo,” he said. “If we do renew with Presbyterian we can cancel within 30 days.”

It was then that Gonzales made a motion to accept the Presbyterian plan. “They have been good to the community,” he said. Milton Ulibarri seconded his motion.

Wagner then asked for an amendment to the motion to go ahead with the Presbyterian plan but check with NRECA for a competitive quote.

“If it’s not reasonable then I will go along with the motion,” he said. “I would like to frame this as a friendly motion.”

When a second on the amended motion was called for there was none, leaving Gonzales’ original motion to stand for a vote.

Wanting to lock in the numbers from Presbyterian for the beginning of the year, Harold Baca said he was willing to vote in favor of the new plan.

“If NRECA is lower, we have 30 days to cancel,” Baca said.

“Are you going to ask?” Wagner countered.

Baca said that would be up to the new board.

Bustamante said the co-op did belong to NRECA at one time.

“We couldn’t afford them. It became too expensive for the co-op,” he said. “That is the reason we got away from them.”

When Bustamante called for the vote, Wagner was the only dissenting vote with the other 10 board members voting in favor of the Presbyterian plan.

In other insurance news, Manny Marquez reported that due to low numbers of claims the co-op’s workman’s compensation rates would not increase for the coming year.

As the meeting wrapped up, Bustamante called on the trustees to bring up other items of concern. Leo Cordova said he had invited local media to the next meeting to specifically put out the word that, “District 1 is not involved with Charlie Wagner.”

Bustamante said that due to some concerns voiced to him, he was asking the board to set a date for an informational meeting prior to the co-op’s spring annual meeting to inform members about resolutions passed by Wagner in District 5.

Wagner asked if one individual had come to Bustamante or several. The board president declined to name names, and said there was a request to get information out before the annual meeting, but Wagner pressed him.

“You’re going to have to do better than that,” Wagner said.

Dr. Donald Wolberg intervened.

“This comes with no ulterior motive,” Wolberg said. “I think it is important for people to understand why you do what you do. For example, people don’t understand the $10,000 cap that was put on things. You can’t operate that way.”

Baca objected, saying Wolberg voted in favor of the cap.

“No, no, no. I stood up and said we have to understand what’s being spent and why it’s needed,” Wolberg said. “I have no ulterior motive and no game plan. People have approached me. People need to understand what and why you do things. Yes, there will be some tough questions but if you do this before the annual meeting I think it will resolve many issues.”

Wagner asked if the proposed meeting would be for all 9,000-plus co-op members or separate meetings in each district. Wolberg suggested holding one meeting and utilizing the local public access station Channel 12. Baca said the station did not broadcast outside the city and didn’t reach the outlying areas.

The board ultimately voted unanimously to hold an informational meeting but did not set a date.