buy back increase 2009

Nassau County Comptroller Howard Weitzman today proposed a cost-saving change to the County’s health benefits buy back program that would allow the County Executive to increase the amount of reimbursement participants receive from the program, which in turn would save the County money in health benefits costs. Weitzman said that if the County doubled the buy back amount for employees, the County could save approximately $400,000 in health benefits costs.

“If the County gives a little bit more, we will save a lot more,” said Weitzman. “It’s simple math. We know that if we double the buy back amount and increase the number of participants we can save money. We hope that in these tough economic times we might have additional people willing to participate at a new, higher rate. The more employees who participate, the more we can save.”

Currently, there are 507 employees who take the buy back at $2,000 for a family and $500 for individuals, but Weitzman said he believes this number would increase if the County increased the buy back amount. The number would have to increase by approximately 125 to achieve a savings of $400,000, taking into consideration that both old and new participants would now be receiving the higher buy back amount.

Many governments such as Nassau County offer cash incentives to employees to voluntarily opt out of their health insurance plans. Participants must have alternative coverage to receive the buy back. Most buy back participants are covered by a spouse or domestic partner’s family health insurance. The County currently saves $6.7 million on health benefits by offering buy backs.

Weitzman began exploring this possible change to the buy back program last year when he and the County’s Human Resources Department distributed a short questionnaire developed by the Comptroller’s Office to all County employees in order to gather information to help decide whether and by how much to increase the buy back. The survey generated 600 responses, showing significant awareness of and interest in the buy back. Of the respondents who did not currently take the buy back, 81 had a spouse who worked for another government and therefore could realistically be expected to consider switching to the buy back. When given a choice of buy back amounts, 75% of the respondents who do not take the buy back said they would be interested if the buy back was increased from $2,000 to a range of $5,000 for family benefits.

Any change to the buy back program must be approved by the Nassau County Legislature and the County’s unions.

“With the current state of the economy many employees can take advantage of a program that can provide them with extra funds, while the County can save taxpayer dollars,” Weitzman said.

According to the Comptroller, the current rate for buy backs has not been updated since 1988, when the program was first established. Back then, the $2,000 buy back amount was over 50% of the total cost for family benefits, which at the time was $3,877. Since then, health care costs have exploded. The county now pays $15,386 a year for family coverage, while still offering a $2,000 a year buy back. The program would only be implemented if the new number of participants results in annual saving to the taxpayers.

“It has to be a win-win for both taxpayers and participating employees,” Weitzman said.

For more information, visit the Health Benefits FAQ’s at http://www.nassaucountyny.gov/agencies/Comptroller/Employees/Health/index.html

Weitzman proposes increasing cash incentive for County employees who opt out of health insurance

Doubling buy back would save County $400,000