Education

Bernards Township School Board Considers Possible Health Self-insurance Plan

William Annin Middle School, 70 Quincy Road, Basking Ridge. Credits: By Linda Sadlouskos

 

BERNARDS TWP., NJ -  The Board of Education is considering a self-insurance plan for health benefits in which coverage and costs to the employee would be unaffected, but would make the school district the administrative handler and payer of most claims.

The change could save the school district, which has about 720 employees under the health plan, up to $1.2 to $1.4 million a year, insurance consultants say.

The plan would continue health coverage under Horizon Blue Cross Blue Shield, but the district would handle the claims and make the payments, as described by representatives of the Arthur J. Gallagher benefit services firm, based in Princeton.

Sign Up for E-News

Under the concept, the school would keep coverages, premium costs, deductibles and other features of its health benefits system.

While saving money is a huge attraction, the change in its most extreme could put the school at risk in the event of many large claims at one time, or even expensive litigation. The district would probably buy re-insurance to cover circumstances where any one individual, or the entire system, reaches pre-determined “stop loss” levels.

Gallagher actuary Christopher Diorio said the Bernards Township school district has a relatively stable claims experience that makes it a good candidate for self-insurance.

He said self-insuring could bring the district’s health premium costs to an estimated $13.3 million, down from a projected renewal of $14.7 million.

The school would save because it would avoid paying state tax, federal Affordable Care Act costs and a profit margin for the carrier.

The school would have to expect fluctuations in cash flow, Diorio said, with a cash reserve building in the first months and then leveling off as claims are submitted, items like prescription drug rebates are received and regular administrative payments to Horizon are processed.

Diorio said the school would “probably need five to 10 large claimants to not get the bang for its buck.” 

He said health care premiums would likely rise year to year, but probably not as much as the eight to 10 percent increases now being seen.

Business Administrator Rod McLaughlin said after the meeting that self-insurance could provide the benefit at a more stable cost for the district, without changing the scope and coverage of its health plan. 

The reduction would also help the school district in its annual attempt to stay under the maximum two percent increase in tax increases in the annual school budget. Employee benefits account for $14.4 million in a $93 million general current expense in the 2017-18 year.

The board is aiming at a decision by the end of the year, in order to help in compiling the 2018-19 school budget.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Basking Ridge

Somerville Christmas Tree Decorated, Wrapped in Lights, Ready for Santa's Magic Touch

November 18, 2017

SOMERVILLE, NJ - The stage is set for thel arrival of Santa Claus Nov. 25 with the borough's official Christmas tree decorated, with lights strung and ready to be lit, on the Division Street pedestrian mall.

No snow yet, but with crisp temperatures and brisk winds blowing down Division Street, it's beginning to feel a lot like Christmas; a few merchants have already begun trimming ...

Coaching Virginia Tech Lacrosse Paige Petty

November 15, 2017

BERNARDSVILLE, NJ - It has been suggested that coaching is the language of learning and transformation. Whether on or off the playing field or court, good coaching changes the way we perform. Great coaching changes the way we think. 

Whether working with NFL athletes, some of next season’s draft hopefuls, or the area’s rising female athletes, Brian Martin has built a ...

Sustained, Severe Cuts Equal Setbacks at NJ Department of Environmental Protection

November 8, 2017

Long-term budget and staff cuts have severely impacted the ability of the New Jersey Department of Environmental Protection (DEP) to carry out critical work to protect New Jersey’s environment and residents. This has serious implications for wildlife, public health and our economy. DEP is charged with managing and protecting the State’s environment and natural resources.

This ...

Upcoming Events

Tue, November 21, 9:00 AM

The Center for Contemporary Art, Bedminster

2017 International Juried Exhibition

Arts & Entertainment

Tue, November 21, 9:00 AM

The Center for Contemporary Art, Bedminster

2017 International Juried Exhibition

Arts & Entertainment

Wed, November 22, 9:00 AM

The Center for Contemporary Art, Bedminster

2017 International Juried Exhibition

Arts & Entertainment

Children in Fifth to Eighth Grade Invited to Enter Elks Americanism Essay Contest

November 19, 2017

"Why Our Veterans are America's Heroes".

This is the theme for the Elks Americanism Essay contest. There are two categories ...... 5th and 6th graders and 7th and 8th graders.

The rules and the cover sheet that needs to be filled out and submitted with each essay are on the photos, and may be reproduced. 

Essays cannot be more than 300 words long, and should be ...

AtlantiCast: Episode 007

On this week’s AtlantiCast, you’ll see how Atlantic Health System is driving innovation and finding new ways to solve tomorrow’s health care challenges, find out how a near tragedy on the tennis courts was averted thanks to some world-class training and technology at Chilton Medical Center and meet the 70 cancer doctors you need to know about – plus much ...