MARGATE — With a 13 percent increase in the cost of the State Health Benefits Plan administered by Horizon Blue Cross and Blue Shield, the Board of Education is considering switching to a lower-cost plan.
“This is the first time in many years we have seen an option to save money on health benefits,” board President Jim Olivo said.
The Board of Education heard from two health insurance brokers at their Oct. 11 meeting, but tabled a vote on selecting the broker.
Both brokers provided the board with cost estimates for identical AmeriHealth plans. The district's current broker provided a cost estimate for an 18-month “trust” plan exclusive to his brokerage firm for districts with fewer than 100 employees that have good claims experience. The second offered a 12-month “direct” plan. Both will save the district more than $100,000 in health benefits costs over the term of their plans, which offer the same benefits to district employees.
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Margate Education Association Vice President Ron Pinter said the union reviewed the AmeriHealth plan, which must be equal to or better than the state plan for the board to make the switch. However, several teachers may have to change doctors because they are not included in the AmeriHealth network, he said.
“I have been told there are a small number of doctors, five to be exact, currently being seen by some employees that are not participating in the AmeriHealth plan,” Pinter said, reading from a prepared statement.
He recommended the board ask all employees to check to see if their doctors are plan participants.
Pinter thanked the board for allowing the membership to review the plan before it is changed.
“The board has the right to make this decision without our input,” he said.
Olivio said the board has an obligation to carefully research both proposals.
“Teachers have a vested interest in us doing our homework,” he said. “We care about the employees of our district.”
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The 18-month Public Employee Trust quote provides the board with a savings of $110,000 over the life of the contract, said Gary Goldfarb of Brown and Brown Benefit Advisors, which has offices in Moorestown, Lambertville, Roseland and Shrewbury. Rates would be guaranteed over the life of the contract and provides the board more protection against rate increases, he said. His commission would be 5 percent.
Goldfarb said his firm is the only brokerage that can provide the trust plan, which is only available to qualified “healthy” groups and provides the most protection against rate increases, he said.
There is no penalty to leave the trust if the district doesn’t like the plan, however, when it comes time to renew, the rate at that time is non-negotiable.
Board member Tracy Santoro said she thought that would be a drawback, because the board could negotiate a new rate upon renewal of a direct plan.
“The trust is not negotiable, while the direct quote is,” she said. “That is a downside to the trust.”
Goldfarb said rate increases over the last several years have been less than 8 percent.
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Sean Gormley, president of Innovative Risk Solutions of Egg Harbor Township, the largest benefits provider in Atlantic County, presented the AmeriHealth direct plan for a 12-month period. The plan would save the district $142,000 over 12 months. The difference between the state plan's proposed 13 percent increase and the rate proposed by IRS for the same time period results in a savings of 7.7 percent, Gormley said.
The rate would be negotiable upon renewal and his commission would be 2 percent, he said. Rate increases would be available for review 60 days before the renewal date.
The board tabled a motion to approve a change, but agreed to hold a special meeting 5:30 p.m. Tuesday, Oct. 24, in the cafeteria at the William H. Ross Elementary School.