Fort Smith director: New insurance plan could cover Convention Center shortfall

Fort Smith City Director Gary Campbell is proposing that the city can solve its future and certain convention center deficit by using the Arkansas Municipal Health Benefit plan to cover city employees.

Arkansas turnback funds supporting the Fort Smith Convention Center — about $1.8 million a year — will end in July 2010. The annual deficit without the turnback funds could be as high as $1.2 million. Plans to cover the deficit include a 1% hamburger tax and reinstating the city’s business license fee.

Campbell, who is the current president of the Arkansas Municipal League, suggests that using the Arkansas Municipal Health Benefit plan could save the city up to $3 million a year compared to the city’s current plan.

“One way to cover the Convention Center deficit without rushing into a risky election would be to determine how we could utilize the less expensive Arkansas Municipal Health Benefit Plan and determine the potential savings for 2010,” Campbell noted in an e-mail memo to Fort Smith City Administrator Dennis Kelly.

Campbell also raised the issue in the Tuesday (Nov. 3) board meeting.

In the memo, Campbell listed several reasons the Arkansas Municipal plan is preferable to the current plan.
• Comparable to our current plan including wellness features
• Zero co-pay
• Higher maximum lifetime benefit (e.g. $2M vs the current $1M)
• Life Insurance premiums are 67% our current plan
• Lower management fees (3% versus our current 8%)
• Most Arkansas cities that offer employee health coverage utilize this plan
• Many cities have seen their health care costs reduced year to year.
• Both hospitals are active in the plan
Most local physicians are already active in the plan
Most surrounding cities utilize the plan, including Van Buren and the Fort Smith Housing Authority
Physician reimbursement is higher than our plan, which could contribute to better physician recruitment and retention
Hospital reimbursement is higher than our plan, which could benefit our hospitals

“As the 2nd largest city in the Arkansas Municipal League, Fort Smith would have a voice in its self-insurance management decision,” Campbell noted.

Campbell asked Kelly to schedule a meeting “as soon as possible between key staff members” and Don Zimmerman, director and health plan administrator for the AML, to compare the financial and health care features between the League’s plan and the city’s existing plan. Campbell’s request received support from City Director Cole Goodman.

“If we can get the same or better coverage at significant savings, we need to seriously consider this,” Goodman said in an e-mail response.