On Thursday, council members told Sally McGuffey, of McGuffey Life and Health in Stanford, her insurance company would not be the agent for the city's intended one-year contract after a state plan was found to be more affordable for the financially struggling city.
The state's insurance plan, which would put the small group of city employees in a pool with more than 200,000 workers, would lower the cost to the city and provide better benefits.
"From what I've seen from the policy, the state's plan is a much better plan for us," said Police Chief Keith Middleton.
"You're shooting yourself in the heel every time you take your money out of town. You all are going to have to learn to back your own," said McGuffey.
"But I can't compete with the state ... No, I don't like to lose business, but I don't want to knock them out of benefits either."
Even with the less expensive state plan, there is a risk the premiums could rise above what the city can afford. Carter said higher out-of-pocket costs are a risk some are willing to take, though council members set a cap on their financial obligation.
"Our employees are saying, 'We'll take the gamble. Put a cap on it, we'll go with the better plan,'" Carter told council members.
During the three-year state contract, employees would float the difference if city premiums rose above $6,632 a month. The new insurance plan will go into effect July 1.
In the interim, a less beneficial, but more affordable, Bluegrass Family Health plan has been voted in, starting Feb. 1. McGuffey will be the city agent for the five-month period.
Though McGuffey said she will remain friends with those involved and business was business, council member Steve Lucas voiced his frustration at the city's selection process and personally apologized to McGuffey.
"I am not against the employees getting what they want," said McGuffey. "Of course I am disappointed, I wanted to be your agent, but I just can't compete with the state."