Move from current self-funded plan is expected to save $400,000 annually
By Audrey Levine Staff Writer
A change in insurance providers approved by the Township Committee this week may help the township save about $400,000 a year.
The committee approved a resolution to rejoin the New Jersey Health Benefits Program as of Nov. 1, after the township’s health benefits consultant — John Phelps, of New World Insurance services — found it would be cheaper than funding a self-insured system.
For the past 10 years, the township has had a self-funded employee benefits plan, but, according to Kevin Davis, township clerk, this is the first time the state program has cost less than the current plan.
Mr. Davis said the state Health Benefits Program will cost $2.4 million for the township’s 165 employees, as opposed to the $2.8 million it would cost to remain self-insured.
”According to township records and minutes, 10 years ago when the township switched to self-funded employees’ health benefits plan, there was a cost savings going in that direction,” said Mayor Anthony Ferrera. “Now, given the rising cost of health care and the benefits of pooling larger groups of employees, we have been advised that it is less costly to again become part of a much larger state program.”
Mr. Davis said that all township employees, elected officials and their dependents are included in the state plan, which offers three different options — the traditional plan, several health maintenance organizations and NJ PLUS — all with a variety of medical providers to choose from.
In conjunction with the change, the Township Committee also approved a resolution to end its work with Insurance Design Administrators, which acted as a third-party administrator for the township while the health benefits were self-insured. The termination of the contract will be effective Nov. 1.
”Working with the township’s health benefits consultant, it has been projected that changing over the employees’ health benefits program from the township’s self-insured system to the State Health Benefits Program, will result in several hundred thousand dollars in cost savings,” Mayor Ferrera said.
The state plan offers local employees coverage so long as they are full-time, working no less that 20 hours per week. Part-time employees are eligible for coverage under NJ PLUS, which is a combination of health maintenance organizations and indemnity coverage, if they are also members of the state-administered pension system, according to the state Web site.
Committeeman Bob Wagner abstained from the discussion and subsequent vote because the company he works for, Magellan Health, processes claims for the State Health Benefits Program with regard to substance abuse and mental health.

