Rising healthcare expenses cut into the Columbia city budget

1 year 3 weeks 5 days ago Wednesday, December 20 2017 Dec 20, 2017 Wednesday, December 20, 2017 12:18:00 PM CST December 20, 2017 in News
By: Charles Nichelson, KOMU 8 Reporter

COLUMBIA – The City of Columbia rolled back its bussing services on Nov. 1, hoping to cut down on costs for a Parking and Transit Department which has seen revenues fall and costs rise over the past five years.

However, one growing cost the department cannot avoid is providing healthcare for employees, due to the implementation of more provisions of the Affordable Care Act (ACA). The Director of Human Resources for the city, Margrace Buckler, said the costliest effects of the last administration’s signature healthcare bill have been the employer mandate, mandatory preventative care, and the extension of dependents to the age of 26. 

“The contribution dollars, in order to cover the claims, have gone up pretty significantly,” said  Buckler.

Buckler said the transit department is one of the departments that has been affected the most, “because they utilize a high number of temporary employees.”

Before 2015, the department insured only one temporary employee; however, due to the ACA’s mandate that employers with more than 50 employees offer healthcare to those working more than 30 hours per week, that number has increased to 28 employees.

“That made their budget spike,” said Buckler.

And Columbia’s Parking and Transit Manager Drew Brooks said the city is still short on bus drivers, despite the route reductions. “There’s always a struggle to have enough drivers,” said Brooks, “so we’ll continue to hire simply because we’ll need to fill positions as we have turnover.” 

Now, all of the drivers that Brooks hires are offered healthcare, which is a variable every year.

The city had a nearly 65 percent turnover-rate among part-time bus drivers in 2016, according to Brooks. While it’s not quite as high for full-time drivers, the need for temporary drivers during the fall and spring semesters, and the rotating door of part-time employees, has been costly.

Since 2012, the city’s health insurance contributions for paratransit employees has remained relatively consistent, fluctuating around $75,000. In the same span, that number has almost tripled to more than $262,000 for fixed route drivers, and is more than 10 times larger for university shuttle drivers, costing over $107,000 in 2017.

The transit department's healthcare contributions overall have already exceeded $445,000 this year. In 2012, it spent $180,797 in total. Buckler said the ACA made budgeting for temporary position much tougher for all departments in the city.

Another reason transit costs continue to rise faster than revenue is because Missouri's state government is one of smallest contributors to public transit in the country, according to Brooks. To help supplement, the transit department has even converted most of its temporary employee budget to full-time spots. However, the university shuttle system only operates nine months out of the year, meaning most of its drivers are temporary.

"That has been somewhat successful," said Brooks, but, "flexibility is limited."

The city continues to utilize a consultant to help project future healthcare costs, and has even considered using a private insurer or tweaking plan designs, but the focus has been maintaining what it already does.

And with all the discussion of rising premiums and talk of legislative change in Washington, Buckler said, “I don’t think anyone is in a panic,” but the city is wrestling with questions of what it would do if the Affordable Care Act was partially or fully repealed. 

“Until it gets here, oh my!” said Buckler. “It is anybody’s ball game.”

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