By Tammy Gray An in-depth discussion regarding health insurance options by the Navajo County Board of Supervisors last week revealed at least one reason why costs are so high for everyone: third party administrators, consultants and the federal government take a hefty chunk of every monthly premium. In addition, some health insurance policies pay for insurance against catastrophic claims. Navajo County government, for example, will pay $64.96 per covered employee per month in administrative fees for health insurance in the upcoming fiscal year. In addition, the county will pay $23.64 per covered employee for stop loss insurance against medical claims that are over $250,000. That comes to a total of $88.60 for each covered employee, every month. In the previous fiscal year, the county paid $91.51 per employee per month, which included $67.43 for administration of the plan and $24.08 for stop loss insurance. If the county had remained with the state insurance pool, those costs would have risen to $84.30 for administration and $26.16 for stop loss insurance for a total of $110.46 per employee per month. During the discussion, District III Supervisor Sylvia Allen asked whether there was a way to eliminate most of the administrative costs. “There’s $64 paid out and we haven’t even paid a penny to a doctor or hospital yet,” she said. CBiz Accounting representative Mike Barberio, who was part of the consulting team that prepared the new insurance proposal, explained that most of the third-party costs are necessary to meet government reporting requirements. He noted that, in essence, the money covers the cost of preparing, maintaining and submitting government-required records. According to Barberio, if the county were to administer the plan itself, not only would it be costly to provide the necessary manpower, but there could be several legal issues, such as staff members who know each other personally having access to sensitive medical records. “It would be very easy to accidentally violate HIPAA (Health Insurance Portability and Accountability Act),” he said. The HIPAA regulations require that medical records be kept private and impose severe penalties for not doing so. Barberio explained that new health insurance rules also require that administrative costs for health insurance plans be limited in comparison to the amount paid for healthcare. “The Affordable Care Act requires that 85 cents of every dollar be spent on healthcare,” he said. “This plan is at about 10 percent (for administrative costs), so we’re starting out at five percent to the good.” Allen noted that she believes that the amount of government regulation that leads to 15 percent administration costs is excessive and intrusive, and needs to be stopped. “We’re going in the wrong direction with regulation,” she noted. The total cost for a Navajo County silver health insurance plan, which offers 80 percent coverage for most Aetna network services after a $1,500 deductible, is $546.66 per month. The plan offers nearly 100 percent coverage for services provided through Summit Healthcare. The county will cover $491.99 of that cost for employee-only coverage, while the employee will contribute $54.67 in a 90/10 cost share. The cost share for a family insurance plan is 80/20. The monthly administrative costs per covered employee are $15 for consulting, $8.75 for network access, $20.55 for third party administration, $1 for prescription administration, $3.95 for health savings account administration, 75 cents for flexible spending account administration, $1 for a wellness portal, $1.50 for an employee assistance program, $2.50 for online enrollment and $9.96 for Affordable Care Act fees, for a total of $64.96 in monthly administrative fees.