With preliminary budgeting for fiscal year 2013-14 under way, the city of Kalispell is bracing to see 6 to 9 percent growth in its health insurance rates.

That’s the warning coming from the Montana Municipal Interlocal Authority, based on claims data through January.

“We all pray it’s not going to be nine percent, but until we get that final number we won’t know,” said Terry Mitton, Kalispell’s human resources director.

Montana Municipal Interlocal Authority will continue to review claims from member cities including Kalispell through March before settling on a final rate adjustment.

Last year, Kalispell was told to expect a 5 to 8 percent rate increase for its roughly 180 full-time employees. Only a 5 percent increase materialized. 

But that was enough to bump the city’s health insurance costs for this fiscal year — which runs through June 30 — to more than $2.1 million.

“Last year they said about the same thing and came in at five percent,” said Rick Wills, Kalispell’s finance director. “We hope they’re doing the same thing this year — estimating high so they can come back and make us feel a little better.”

Much of the increase would be funded by Kalispell’s permissive health levy, extra property taxes authorized by the state about a decade ago as a way to help cities pay for growth in their government fund health insurance costs.

Kalispell’s permissive health levy hit a 10-year high of 18.5 mills this year. That’s budgeted to raise about $725,000 and makes up almost 10 percent of the city’s total direct tax rate of 187.4 mills, which also is at a 10-year high as the city continues to levy the maximum allowed by state law.

Health insurance costs for water and sewer employees are factored into the rates Kalispell charges for the services of those enterprise funds.

Insurance premiums for one employee now total $7,296 a year. Kalispell pays 100 percent of the premium for single-coverage plans but makes employees pay some of the premium for plans that cover children, spouses or families.

An employee-and-child plan costs $12,768 a year with the employee paying about $2,400. An employee-and-spouse plan costs $14,616 a year with the employee paying about $3,000 and a family plan costs $19,980 a year with the employee paying about $4,500. 

Single-coverage and family-coverage plans are Kalispell’s two most common plans, with the city generally having about 60 to 70 of each.

Those cost-sharing percentages are the same for all of Kalispell’s collective bargaining units and nonunion employees and have not been adjusted for years, City Attorney Charlie Harball said.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.