Liberty Township officials say internal practices have helped to keep insurance costs low.

Liberty Township officials say internal practices have helped to keep insurance costs low.

At a meeting March 4, the board of trustees voted 3-0 to renew an insurance plan for township employees that raises overall insurance costs by just 1.6 percent in 2013.

That's compared to a 12 percent to 16 percent increase in costs seen by most public- and private-sector Central Ohio employers in 2013, according to insurance broker Tom Hedge, who represents Liberty Township.

The trustees agreed to a 6 percent increase in the carrier-insured portion of the plan. But internal cost-avoidance efforts resulted in savings that dropped the overall price hike to 1.6 percent, said Township Administrator Dave Anderson.

The township has been able to keep increases to a minimum by switching to a self-insurance model, Anderson said.

"That's a big part of our success," he said. "We've gotten much more involved with the finances of our employees."

The plan gives the township more control over employee health-insurance premiums, but it also means the township takes on more risk if claims exceed what the township budgeted for them.

To offset that risk, the township adopted an employee wellness program in 2011. It offers financial rewards to employees who quit smoking or adopt healthful habits.

That means healthier employees and fewer claims, Hedge said.

"We engaged employees at a higher level and we saw our utilization drop from 70 percent hitting their deductible to 44 percent hitting that mark. That's a big difference," he said.

Anderson said 50 percent of employees are actively participating in the wellness program. That's contributed to a 15 percent drop in prescription-drug use, he said.

"We know that about half our people are getting away from smoking, high blood pressure and cholesterol issues," Anderson said.

He said township employees also have agreed to shoulder a larger share of health-insurance costs in the past several years. This year, firefighters will pay for 15 percent of health-insurance costs; administrators and other staff pay for 20 percent. Starting in 2014, firefighters also will contribute 20 percent.

"It makes them think, 'Do I really need to go to the emergency room when I could go to the doctor's office? Can I get the generic drug instead of the brand name?' " Hedge said.

Under the new contract, employees pay a $1,000 deductible for single coverage and $2,000 for family coverage.

The contract retains another popular provision that has helped the township save money, Anderson said. Employees who opt to be covered by their spouse's health-insurance plan still receive half the money afforded under the township's plan.

Liberty Township renews its insurance plan annually.