RANCHO CUCAMONGA - The city recently switched health benefit plans for employees who were under Anthem Blue Cross to a new health insurance plan in order to reduce rates for city workers.

City staff was recently notified by the city's insurance broker of increases of nearly 30 percent in Anthem Blue Cross medical premiums for the 2013 calendar year.

The large increase was due to the fact that the city is a relatively small group of about 400 employees with high claims, officials said.

"Recognizing that such an increase heavily impacts both the city and our employees, staff sought out other options including large insurance pools," according to a city staff report on the situation.

The city is now partnering with a new health plan, Anthem Blue Shield, under the California State Association of Counties Excess Insurance Authority.

City officials said joining a larger insurance pool of about 80,000 local government employees should reduce rates for employees.

"We are a very small group and because of the claims' history and the demographics of the group rates were higher, by going with a larger pool, we are saving some money by doing that," said Chris Paxton, human resources director for Rancho Cucamonga.

"We're going from a group of 400 employees to a group of 80,000 employees. Right now, we have insured 400 employees and it doesn't take much to have a couple of big claims in a small group impact the rates pretty substantially."

In order to join the new plan, a requirement under the CSAC prohibits new employees from receiving cash-in-lieu payments, if they forgo paid medical insurance and if they receive medical coverage through other means, such as a spouse's plan.

The city currently has a cash-in-lieu agreement with its bargaining units, providing payments of up to $300 a month. The CSAC has consented to allowing employees who currently have the benefit to maintain it, though no additional cash-in-lieu benefits can be granted to employees in the future.

"So in order to join the pool, we had to get our employees to forgo that benefit going forward," Paxton said.

The new medical premium rates are expected to take effect on Jan. 1.

The change does not affect city employees who are under the Kaiser Permanente health plan, Paxton said.


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