ANDERSON — Although many city employees have seen their insurance premiums rise at the beginning of the year, the city’s recent carrier change is expected to save the city money and help employees in the future.

Anderson switched to Wabash American Benefits Group from its former insurance carrier, Anthem, as of Jan. 1. Since then, city employees have been confused over why their rates went up when Personnel Director Steve Priser said the city was saving money on the deal.

“The insurance that we enjoy has not in any way changed,” Priser said at Thursday’s City Council meeting. “There has been much controversy about that and much confusion.”

But what has changed is employees’ insurance rates; as an example, Councilman Art Pepelea Jr. showed a 34.5 percent increase in his own health insurance rate this year.

Priser said the city budgeted for this year’s rates in April, based on projected increases from Anthem. In June, Priser received word that Anthem’s rates would go up dramatically, prompting him to look for a new carrier.

However, the city won’t budget for the new carrier’s rates until this April, and Wabash American owner Tracy Williams said he hoped employees’ rates wouldn’t increase next year based on the new budget.

In the meantime, the city will save almost $400,000 for which it budgeted this year by switching to Wabash American. That company’s quote was $688,867 compared to Anthem’s $1,083,657 bid.

Councilman Rodney Chamberlain said the city’s savings didn’t seem fair to some employees who were paying higher premiums.

“We’ve got some city employees that aren’t happy that their rates went up but we’re saving money,” he said.

The savings will help to rebuild the city’s insurance reserve fund used to pay claims that exceed the budgeted amount.

“The insurance funding needs help,” Priser said. “The insurance reserves as of today are just a little over $800,000. I don’t find it desperation, but I find it very alarming.”

Chamberlain said the city acted too quickly and did not give enough notice to city employees or council members of the carrier change.

“Being a representative for council, I felt that I should have been notified that we were even looking at changing carriers,” he said. “We should have probably just waited a year before we made this decision.”

But Priser said the city didn’t receive any quotes from insurance companies until mid-October and then his office had to negotiate prices with them before a decision could be made.

“We made a decision at the 11th hour,” he said. “We couldn’t go another year at the rate we were going; we would be bankrupt.”