&uot;Tough breaks&uot; for city employees, combined with rising insurance costs nationwide have the City of Natchez searching for a way to pay $250,000 worth of outstanding health insurance claims.

When putting together the city’s budget last fall, officials set aside $100,000 for employee health insurance, said City Clerk Donnie Holloway.

The city is self-insured up to $25,000, meaning it pays employee claims less than that amount. Anything more is covered by the city’s &uot;reinsurer,&uot; Mississippi Municipal Service Company.

The reinsurer premium is paid in part by the city, with the rest coming from individual employees.

Each of the city’s 285 employees contributes about $178 a month for family coverage, and the city picks up an additional $150 for a total of $42,750 in insurance costs to the city per month.

Holloway said the city’s portion of the reinsurer’s premium comes out of the general budget, not the $100,000 self-insured pool.

As the cost of health insurance steadily rises nationwide, several city employee illnesses drained the insurance budget within only a few months.

&uot;We’ve had a lot of tough breaks with illnesses this year,&uot; Holloway said, giving examples of major operations, long illnesses and costly cancer treatments.

Even the occasional loan from the city’s gaming fund – normally reserved for capital improvements – hasn’t been enough.

Since January, the city has been holding its employee claims – about $250,000 worth – until Mississippi Municipal Services reimburses them.

Last fall, the city increased the amount it pays for individual coverage for its employees by $25.

And Holloway said the city may soon have to absorb another increase rather than pass it on to its employees, who haven’t had a salary increase since 1998.

&uot;You can’t ask your people to pay more when they haven’t had a raise themselves,&uot; Holloway said.

But Holloway said Natchez isn’t the only municipality grappling with rising insurance costs.

The City of Laurel, which is fully-funded, recently faced a $350,000 increase, and Jackson’s premium jumped by a third.

And the cities are not alone, Adams County recently experienced an increase equal to about $35 more a month per employee, said County Administrator Charlie Brown. Beginning April 1, county employees now pay $194 a month for family coverage.

The increase came as the county switched providers to avoid an even greater increase with its former carriers, Brown said.

Brown said counties often face rising health insurance premiums because so many of their employees are older, a demographic reality that also translates into more claims.

&uot;You go through periods where you have a lot of claims and then you have periods where you don’t have hardly any,&uot; Brown said. &uot;It’s like a roller coaster.&uot;

The Mississippi Municipal League is largely responsible for a push in the Legislature to pull municipalities under the state employee plan and level out insurance costs.

MML Executive Director Jeanie E. Smith said it is almost impossible for cities to find &uot;good, fair equitable&uot; health insurance, especially cities with a small number of employees.

&uot;It’s a tremendous problem that’s going to get nothing but worse,&uot; Smith said.

A bill to bring local government under the umbrella of state health insurance failed in committee during the 2001 session, but Holloway said he expects it to reappear next year.

&uot;Hopefully, it will get back on the agenda, but that won’t be for another year,&uot; he said.