The average municipality in Tennessee spends 28 percent less on employee health insurance than the U.S. average for all employers, according to a study released Monday.

But most of the relative savings for city governments in Tennessee comes from fewer people being covered by the plans and the cheaper health care costs in the Volunteer State, the study’s author said.

“This tends to be a lower cost region of the country and, on average, fewer family members are covered by these plans,” said Mark Morgan, president of Sherrill Morgan, the Covington, Ky.,-based consulting firm that conducted the study for the Tennessee Municipal League. “But overall, most city plans still have richer benefits with lower deductibles than the plans being adopted in the private sector.”

Among 177 health care plans offered by city governments across Tennessee, the average cost of $9,092 per worker was well below the $12,680 average cost for all employers, according to studies by Sherrill Morgan and the Kaiser Family Foundation. But the share of city government employees with family coverage in Tennessee was well below the U.S. average.

The survey of city health plans was the first such statewide sample by TML and found that 7.4 percent of cities in the poll reported that they offered no health insurance benefits to employees. Mr. Morgan said small cities, in some instances, offered incentives for workers to join other family health care plans.

In many states, local governments are required to offer their employees health care coverage. But Tennessee does not require such benefits for city workers, Mr. Morgan said.

Among cities offering health insurance, more than a third offered coverage to part-time workers and elected officials, the TML survey found. But the share of cities offering consumer-driven plans such as Health Savings Accounts or Health Reimbursement Arrangements was only a fraction of the U.S. average.

By comparison in Kentucky, nearly half of cities offer either HSAs or HRAs to provide more financial incentives for individuals to watch their health care expenses.

Among city governments responding to the TML survey, the average deductible is $739 for individuals and $1,502 for family plans. Mr. Morgan said he expects those deductibles to rise over time to help municipal employers limit cost increases.

In Tennessee, the Chattanooga-based BlueCross BlueShield of Tennessee provides 64 percent of the city health care plans that are not self funded. But United Health Care and Cigna also compete in the state and some cities have successfully kept rate increases down by shopping among providers.

The city of Signal Mountain, for instance, is cutting what was to be a double-digit increase in premiums from United Health Care for the next year by switching plans next month to BlueCross BlueShield, which quoted a rate only 6 percent higher, according to Signal Mountain City Manager Town Manager Honna Rogers.