Local Republicans push to sever ties with insurance broker it has retained for more than five years.
By: Sharlee DiMenichi
Township Republicans are pushing the Township Council to sever its ties with an insurance broker it has retained more than five years.
However, the Democrat-controlled council agreed Tuesday to consider paying the Business and Government Insurance Agency about $95,000 a year retroactive to 2002 and ending this year. BGIA officials said the company coordinated the township’s transition from being self-insured to participating in the state health insurance plan in 2002. This year, the company acted as a liaison between the township and insurance companies and helped get claims adjudicated, they said.
Of the residents who spoke during the meeting, four were either Republican Party officials or recent Republican candidates for Township Council. They said some services provided by BGIA are unnecessary and others could be provided less expensively by township staff.
In addition, Republican Councilman Ted Van Hessen said BGIA did not have a contract last year and voting to pay the company for work done in 2002 amounted to awarding a contract retroactively, a violation of state law.
Mr. Van Hessen requested that, before the council meeting next Tuesday, the township finance office provide records of all the money paid to BGIA.
According to BGIA, a broker-of-record letter sent by the township in February 1997 designated BGIA as the township insurance broker and enabled it to shop for insurance policies on the township’s behalf.
Steven Edwards and Stuart Migdon of BGIA said the company provided critical assistance to the township in 2002 when it changed from being self-insured to participating in the state health insurance plan.
Mr. Edwards said the company’s expertise in choosing the most cost-effective insurance will be more valuable in 2003 because rates statewide are increasing by 20 to 30 percent.
Mr. Van Hessen said after the meeting that the township could save money by hiring an employee whose time was dedicated to providing the services BGIA provides.
Democratic members of the council defended the township’s relationship with BGIA.
"It’s money well-spent for our employees to have you available," Councilwoman Carol Barrett said.
Ms. Barrett also said BGIA provided essential assistance to employees having trouble getting claims adjudicated.
Dawn Smith, a Republican who ran for council in 2000 and 2002, said township staff could follow up on COBRA enrollment and review retiree lists, tasks for which BGIA asked to be paid.
"I just think that the kind of money that you’re thinking about awarding to this company could be better spent on the township level," Ms. Smith said.

