Margate saves $200,000 on health insurance coverage
By SUZANNE MARINO
Staff Writer
MARGATE – While the cost of health insurance coverage is jumping into the double digits, the city of Margate has managed to catch a break for this year – a pretty big break. The cost of city employees’ health insurance premiums has dropped considerably.
According to Margate’s management specialist, Lisa Harbright, the health insurance premium for 2006 is roughly $2.6 million.
“Our rates decreased by about eight percent from last year. We are saving about $200,000,” said Harbright.
Margate health coverage was self-funded for more than a decade. A consultant, Insurance Design Administrators, would manage the claims, but the claims themselves were paid by the city.
“The city did not pay a premium to a carrier who would then turn around and pay the doctor or the hospital; they paid the actual claims,” said Harbright.
In 2005 the city chose to switch to Horizon as its insurance carrier on the advice of Brokerage Concept, an insurance consultant.
“Fortunately we had a good year in 2005, and the decrease in the cost of insurance for this year is reflected in that,” said Harbright.
In December the city commissioners interviewed and hired a new consultant, Terry Flynn of Progression Benefits Consultants of Northfield. Flynn negotiated for a better price. The result of the negotiation is the decrease in the cost to the city.
But the cost of funding the insurance in Margate has a bit of history. Commissioner John Swift said in a phone interview that the cost taxpayers had to absorb in 2005 would not have been necessary had there been the competitive bid atmosphere that there was this year.
“Last year when we were looking at our insurance our former consultant, Frank Papari of Health Insurance Administrators, was shut out of the process and not permitted to present a competitive bid. Had he been able to compete fairly our cost would have been reduced by about $500,000,” Swift claimed.
“This year we got a renewal quote from Horizon Blue Cross Blue Shield and it was up. When I saw it I said, ‘Let’s go back and get competitive bids.’ When Papari came in and he had had a bid of $500,000 less to go back to self-funded, then Horizon dropped their renewal quote by the same amount,” said Swift.
“Last year the process was really behind closed doors and we were given a worst-case scenario. We approved it taking the information we were given.”
Swift said since that time he has immersed himself in the process so that he is better able to understand.
“Selling insurance and negotiating insurance costs are two very different things,” added the commissioner. “The process and the language is really very tricky. It takes time to understand it and to catch up.”
The cost of family coverage for an employee is roughly $22,000.
Harbright said the city is still working with the carrier and looking at other options for employees that may result in further insurance savings for the city.
