ICMA Surveys Its Members on Health Care

Article excerpt

"Over the last five years, our health care premiums have almost doubled, which is probably fairly representative of the country. Employees have had to forgo wage increases in order to retain health care coverage. Something needs to be done to hold down these costs." This is just one of the comments from managers and other respondents to a survey on health care conducted by the International City/County Management Association (ICMA). Respondents almost unanimously expressed the view that there is a crisis in the health care system and that local government, like private industry, is directly affected by such issues as coverage, cost, and access.

ICMA's survey sought to identify current issues, future trends, and cost containment strategies used by cities. This article highlights some of the key findings.


ICMA's Health Care survey was mailed in November 1993 to all cities in the United States with populations of 2,500 and over and to all ICMA-recognized cities with populations under 2,500. Those that did not respond to the first mailing were sent a second survey. A total of 7,135 surveys were mailed and 3,301 were returned, generating a response rate of 46.3 percent. The respondents were statistically representative of the population, and this high response can be attributed to the interest in health care today. Here are some of the survey results.

Employee Coverage. Almost 99 percent of responding cities offer some type of health care plan to their employees. The most popular is indemnity/commercial (49.2 percent), followed by PPOs (38.7 percent), HMOs (36.9 percent), and other forms (14.8 percent). Although some type of coverage is almost universal, 6.4 percent of cities with populations under 2,500 do not offer any type of health care plan to their employees. This is specially true for cities located in such rural states as West Virginia, Mississippi, and Maine.

Part-Time Employees. Only 24.4 percent of municipalities provide health care benefits to part-time employees, and these employees must work at least 63.9 hours per month, on average, to be eligible. Interestingly, almost 50 percent of cities with populations of 100,000 to 499,999 provide this benefit.

Retired Employees. Retired employees receive some type of coverage from 59.8 percent of the respondents, and the average cost of this coverage to the city is $325,698 per year. There is a direct relationship between population size and retiree coverage; as population size decreases, fewer and fewer jurisdictions provide this benefit. For example, 62.4 percent of cities in the population category 2,500 to 4,999 offer no retiree benefits, compared with 4.2 percent of cities of 250,000 to 499,999. Almost 85 percent of cities offer the same benefits to retired employees as to current employees, but only 16.4 percent provide coverage to retirees' dependents.

Further, among survey respondents, 100 percent of the cities with 3,000 to 4,999 employees provide health care coverage for their retired employees. Retired employees who had worked in municipalities with at least 500 employees but fewer than 2,999 employees were eligible for benefits in at least 90 percent of the responding cities, while 54 percent of the cities with fewer than 250 employees cover retirees.

Problems. For each type of health plan, the survey asked respondents to identify areas of dissatisfaction reported by employees. The most frequently reported dissatisfaction for HMOs was choice of doctors (44.6 percent), followed by slow response to complaints (24 percent). For PPOs, complaints were slow payment and reimbursement (26.6 percent) and choice of doctors (26.5 percent). Employees participating in indemnity plans indicated problems with slow payment and reimbursement (35.7 percent), as well as slow response to complaints (27.6 percent). It appears that in all three plans, respondents and their employees feel that responsiveness (or lack thereof) is an issue that must be addressed. …