Council Switches to Self-Insurance Healthcare With West Bay Community Health

WARWICK, RI  — The Warwick City Council broke with two years of buying health care from the RI Interlocal Trust Monday night, following the recommendation of the City’s advisor and Mayor Scott Avedisian to pursue self-insurance with West Bay Community Health.

The decision was unanimous, though Councilman Richard Corley and Council President Joseph Solomon each remarked the decision was a difficult one.

Alan Lord, executive director of West Bay, explained his organization is a stop loss pool. Stop loss policies take effect after a  threshold is exceeded in claims.  The insurance provides protection against catastrophic or unpredictable losses.

According to their website, WBCH provides coverage from each member’s attachment point to $500,000, then purchases stop loss coverage for claims above that limit.

Alan Lord, executive director of WBCH, said his company could cover Warwick city employees, with stop-loss insurance to guard against employee costs exceeding that.  Lord said the stop-loss insurance would be $30.26 per employee, per month. Warwick would be responsible for costs up to the first $450,000, then the stop-loss risk pool would cover costs up to $500,000, then Blue Cross would take on any additional costs.

The move to WBCH was supported by the city’s advisor, Rob Calise of the Cornerstone Group, and the council also received a letter supporting Calise’s assessment from Mayor Scott Avedisian in their materials for the evening.

Ian Ridlon, president of the Interlocal Trust, argued to keep the city’s business.

The trust, he said, was established in 1986 to allow cities and towns to team up so they could afford to purchase their own health insurance. The communities within the trust lend the organization buying power to win lower rates, Ridlon said, but, more importantly, stability.

Ridlon pointed out that the stability the Interlocal Trust provides keeps their members rates stable, even if their premium costs spike unexpectedly. That stability has served Warwick well, Ridlon said, during the last two years, when their health insurance costs spiked by more than a $ 1 million.

“If you had gone self insured, at the end of 2015-2016 you would’ve had a $2 million dollar loss,” Ridlon said.

The argument did not persuade council members away from the advice of Avedisian and the city’s advisor, Calise, serving the city for $15,000, said Councilman Jeremy Rix.

Rix said that while the decision seemed a difficult one, he and his fellow council members had decided to follow the advice of the advisor they’d hired to point them in the right direction.

“Good luck to them, because they’ve been $2 million off every year,” Ridlon said.

The City Council’s next meeting is scheduled for May 26 for the first budget public hearing, followed by budget hearings on Tuesday, May 30, Wednesday, May 31, and Thursday, Jun 1.