The village of Brookfield will be able to realize significant savings on insurance premiums it pays for its employees after being accepted into the North Suburban Employee Benefit Cooperative, effective Jan. 1, 2021.
The NSEBC is an insurance pool comprising a dozen municipalities and will provide medical, vision, dental, life and prescription drug coverage for all Brookfield employees, allowing the village to immediately lower the premiums it presently pays working through an individual insurance broker.
Assistant Village Manager George Issakoo said based on a comparison of what the village now pays for premiums versus the rates it will pay as a member of the cooperative starting next year, the village expects to save about $382,000.
Brookfield currently pays about $1.8 million annually in health insurance premiums, according to Doug Cooper, the village’s finance director. Based on the expected rates as a member of the cooperative, the village expects to see insurance premium expenses fall by about 20 percent.
Village Manager Timothy Wiberg encouraged the village to pursue membership in NSEBC based on his experience as a member of the cooperative when he was the village manager of Lincolnwood.
“I told [Brookfield President] Kit [Ketchmark] that there are not many things I can bring you to save this kind of money without degrading services,” Wiberg said.
Wiberg said that unlike obtaining insurance as a single entity through a broker, members of the cooperative pay into a reserve fund and negotiate rates as a larger pool, resulting in more competitive premiums.
“There’s no profit motive,” said Wiberg. “The goal isn’t to make money but to save money.”
Wiberg said there are other benefits. For example, when municipalities like Lincolnwood were, like the rest of the nation, reeling financially in the wake of the 2008 recession, the cooperative was able to reduce premium costs for its members and take some pressure off municipal budgets by tapping the coop’s reserve fund.
“When you’re dealing with private insurance, you don’t get that choice,” Wiberg said.
A switch to NSEBC has been in the works for some time, but the key to making it a reality, said Issakoo, was buy in from union police, firefighters and public works employees.
All three bargaining units ratified new contracts with the village earlier this year and all three contain language allowing the village to move its insurance coverage to a cooperative.
According to village management, NSEBC’s insurance plan options match or exceed the coverage the village presently provides employees and does it with lower premiums and some increases on out-of-pocket maximum costs for prescription drugs.
It will take three years before Brookfield is recognized as a full member of the cooperative and in the first year, the village will have to deposit about $300,000, which can used to offset any annual reserve assessments or excess financial exposure due to claims.
At the end of the year, the cooperative will calculate the village’s reserve assessment in order to bring Brookfield on par with other members. After the third year, Brookfield will be considered a full member and will no longer have to pay the new member assessments.