Township could save $236K by leaving state health benefits program

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By COLUMB HIGGINS
Staff Writer
PETERSBURG – Township committee voted to leave the state health benefits program at a special meeting last Friday.


Officials said that by leaving the state program they can save at least $105,000 over the next 18 months, and potentially as much as $236,000.
Mayor Richard Palombo said a special meeting had to be held Friday because the state health benefits program requires its members to give it 60 days notice before leaving. The township has negotiated a contract with Horizon Blue Cross Blue Shield that will start on June 1, he said.
“We had to let the state know by the end of March in order to realize all of the savings from the move,” said Palombo. “It took a bit longer than anticipated to get the quotes back so we had to schedule a special meeting.”
The contract with Horizon Blue Cross Blue Shield will run from June 1, 2012 to Dec. 31, 2013, said Palombo. The carrier will provide the same level of health benefits that employees received under the state plan, he said.
“I complimented out staff because out metrics came back very favorably when we went out for quotes,” said Palombo. “Health insurance is there for them to use but because they only used it when they needed it we were able to get these savings.”
It’s very likely the township will realize $236,000 in savings over the 18-month contract, said Palombo. That is about a penny on the tax rate.
Committeeman Tony Inserra said the cost of health insurance caught his eye when he was running for office last year. As a private business owner, he’s learned it’s always beneficial to check your policies, he said.
The cost of the state health benefits plan was projected to increase nine percent this year, said Inserra.
Palombo and Inserra both said the savings from the health insurance change will go to the township’s fund balance, or surplus, account.
“People ask if it can go to tax relief this year,” said Inserra. “That would be $10 a year, most people aren’t going to feel that. By going to fund balance, we can build that account back up in case we need it in an emergency or sometime in the future.”
Palombo said the extra money in fund balance could go to hold down taxes next year.
“We held the tax rate to a zero increase this year,” said Palombo. “But because of the drop of ratables that could still mean a rise in taxes. We’re concerned about that, especially next year.”

 


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