The City of Dyersville is on track to save around $150,000 a year, or nearly 33%, on its insurance costs by moving away from traditional co-pay-style insurance to one with a higher deductible next year, although it says the impact to most employees will be minimal.

During the budgeting process that was taking place in January, the council had tasked City Administrator Mick Michel to begin searching for a way to offset escalating insurance costs, which were poised to raise from $455,000 a year to nearly $500,000.

Michel brought over 26 options to the Planning and Administration (P and A) Committee for consideration, and after several months of debate, the council has chosen to stick with a group plan through Medical Associates, although the method in which employees pay for coverage will significantly change.

Under the new plan, the Gold 2-QHDHP, employees will still receive the same level of service and keep their doctors, but the co-pay-style insurance system the city previously used has been done away with. Under the new plan, the deductible for an individual is $3,000 and a family $6,000.

But to help offset costs for employees, the council also approved the creation of a Health Reimbursement Arrangement (HRA), which will buy down those deductibles to $1,500/$3,000.

“The employee will pay first, and then the HRA will pay the remaining out-of-pocket maximum reimbursements,” a memo from Michel states. “This would represent an estimated annual cost between $22,200 t0 $33,300 to the city depending on employee health care needs for the year. However, the city will still have an annual cost savings between $116,796 to $127,896.”

“In the end, this was the best balance of saving taxpayer dollars while still providing the same service,” Michel said.

Tom Westhoff, who served on the P and A Committee, said this was a complicated process but he hopes the council ultimately made the right decision.

“When you’re trying to do what’s right for both the taxpayers and the city employees, you really have to try to strike a balance — hopefully, we’ve done that here,” Westhoff said.

But given the complicated nature of insurance, the council is expecting there to be a bit of a learning curve for employees out of the gate.

Mike Maahs, a city employee who said he and his co-workers had some concerns, felt the decision to make these significant changes was abrupt and few understand what is happening with the new plan.

“It just seems like it was thrown at us pretty quick,” Maahs said.

To help employees navigate the new system, the city will host a meeting with Medical Associates next week to go through all the details.

After nearly 40 minutes of discussion, the council voted unanimously to adopt the new plan, which will take effect Jan. 1, 2022.