Chalk up another win for Blue Cross Blue Shield of Western New York, as the Catholic Diocese of Western New York and all of its separate parishes and private schools have adopted the Community Blue HMO as their single health insurer.
The agreement, which is being announced to parishes on Monday and Tuesday, represents a major coup, not only for Blue Cross for winning the contract, but also for the Catholic leadership, which has been working toward such a change for more than three years.
It means that more than 2,000 employees and as many as 4,000 people at the Diocesan Center, the schools and 252 parishes in eight counties will now be with one carrier as of January. Besides simplifying administration, it will help the carrier and Diocesan officials to better control their health-care costs and predict where losses will come from.
"We're going to be able to analyze their claims data moving forward and manage both the medical and the pharmaceutical coverage over the years," said Kevin B. Gannon, senior client executive with Brown & Brown of New York, the Amherst insurance agency that the Diocese worked with.
Letters have already been sent out explaining the details to parishes and schools, which have been kept abreast of the discussions. Open enrollment is this month for the parishes and schools, but is already complete for the Diocese.
The agreement does not include the employees of the Catholic Health System, but officials said that they'd like to include them as well, although it will likely take at least two more years.
"This has really given them a plan where they can have it affordable to their employees and the employer," said Paul Eberhardt, Diocese director of human resources.
Faced with skyrocketing insurance costs, large employers increasingly are moving toward "sole-source" contracts in which they choose to offer only one insurer to employees, although often multiple plans from that company. That allows the insurer and employer to get a complete picture of workers' health expenses, so that the insurer can base its rates on the actual experience of that specific pool, rather than on the entire local community.
In the past, the Diocese and each of the parishes handled their own health insurance, with at least 10 different medical plans available. But as costs continued to skyrocket, the premium increases became unmanageable. So officials sought to convince all the parishes and schools to agree to one plan sanctioned by the Diocese, to keep health care affordable for both employees and the employers.
"The nice thing about this is that we didn't force it upon anybody," Eberhardt said. "Everybody came to the conclusion that what we were doing was the nice thing to do."
Under the agreement, the Diocese has adopted Community Blue 104 as its officially sponsored plan, although it will allow employees to pay for the more expensive 206 plan if they choose.
But there's a bigger difference in costs, as parishes and schools could save as much as 20 percent of their expenses. And employees will save up to $122 a month in the 104 plan.