Water Utility Saves Money by Switching to HSA


When Mallory Valley Utility District in Franklin started spending $19,000 a month to provide health insurance coverage for its 13 employees, Office Manager Jenny Clarke knew she had to find a less-expensive plan that still provided good benefits.

For a long time Mallory Valley offered a traditional PPO 80/20 plan, where it paid 100 percent of the premiums and employees were responsible only for copays and a $500 deductible for individuals or $1,500 for a family.

“It was very expensive,” Clarke said. “We started looking around strictly because we were hoping we could find something less expensive.”


Clarke mentioned to her Pinnacle financial advisor that she was looking for a new health insurance plan. The financial advisor connected her with an advisor from Pinnacle’s insurance arm, Miller Loughry Beach Insurance Services.

When Clarke outlined Mallory Valley’s needs—less-expensive insurance that keeps employees happy and healthy—Miller Loughry Beach recommended a high-deductible insurance plan with a Health Savings Account (HSA).

Miller Loughry Beach explained that an HSA is a tax-free account owned by an individual to pay for current and future medical costs. The employer, employee or both can deposit funds into the HSA. Employees are not responsible for copays when they visit the doctor. Instead, they use the funds in their HSAs to cover the full cost of a doctor’s visit, prescription or other qualified medical expense until they reach their deductible.

Mallory Valley compared the costs and benefits of its former insurance provider’s plans with what Miller Loughry Beach offered and decided on the high-deductible plan and HSA.

“When we crunched the numbers, we were able to not only save a lot of money, but also provide a better benefit,” Clarke said. “It was just great for us. And we got a level of customer service we’ve never had.”


Mallory Valley now spends $12,000 a month to provide for employees’ health care, a savings of $84,000 a year, while still paying 100 percent of employees’ premiums. At the first of every year, Mallory Valley will use some of the money it saved on lower premiums to deposit the full $2,500 deductible for an individual or $5,000 for a family into each employee’s HSA.

The balance in the HSA account rolls over year to year, and employees can use those funds to pay for medical expenses after they retire.

“When we had a traditional plan, people were going to the doctor more often,” Clarke said. “We were getting a pretty stout premium rate increase each year. Now that we’ve gone to an HSA and people can see the benefit of holding on to that money, doctor visits decreased. We don’t expect to see large increases in our premium.”

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