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

Local Girls Scouts Invite Special Needs Children to 'Game Day' Next Weekend at YMCA

February 23, 2018

BERNARDS TWP., NJ - The Olympics aren't the only games to enjoy right about now. A group of local Girl Scouts working on their Silver Awards will be holding Game Day for special needs children ages 6 to 14 next Saturday, March 3, at the Somerset Hills YMCA in Basking Ridge.

Game activities as well as carnival-style games and prizes will be held in a "safe and ...

‘Reefer Madness’ Comes to Chatham Borough Council; Cannabis Advocates Make Pitch for Chatham Marijuana Shop

February 14, 2018

CHATHAM, NJ - A group of pro-cannabis activists came to the Borough of Chatham Council meeting on Monday night and used the public commentary portion of the meeting to ask the council to support a marijuana dispensary in town.

The advocates, who say they have attended more than 80 town meetings to inform about the benefits of medical cannabis, mentioned the 1936 movie "Reefer ...

Pieces of Time: Applause Rings Out In Two Columbia Middle School Classrooms

February 23, 2018

BERKELEY HEIGHTS, NJ – Thursday night, the mass murder of students and faculty members at Marjory Stoneman Douglas High School in Parkland, Florida, on Wednesday, Feb. 14, seemed to be on everyone’s mind at the Board of Education meeting.

The board observed a moment of silence following the Pledge of Allegiance for the 17 people killed and 14 wounded in the shooting, as well as ...

Upcoming Events

Sat, February 24

Scherman Hoffman Wildlife Sanctuary, Bernardsville

NJ Audubon: Volunteer Art Show!

Arts & Entertainment Green

Sat, February 24, 9:30 AM

Scherman Hoffman Wildlife Sanctuary, Bernardsville

NJ Audubon: Nature-Infused Yoga Winter Series

Green Health & Wellness

Sat, February 24, 2:00 PM

Scherman Hoffman Wildlife Sanctuary, Bernardsville

NJ Audubon: Give a Hoot! Owls of New Jersey.

Education Green

Somerset County High School Democrats to Participate in National March for Our Lives Against Gun Violence

February 23, 2018

BRIDGEWATER, NJ - The Somerset County High School Democrats will have members participating in the National School Walkout March 14 and the national March for Our Lives March 24 in Washington D.C., in support of the national movement generated by the survivors of the high school shooting in Parkland, Florida, according to a release.

The organization has called on county, state and federal ...


AtlantiCast: Episode 12

On this week’s episode of AtlantiCast, decade of excellence makes headlines, as Atlantic Health’s place on Fortune Magazine’s 100 Best Companies to Work For List leads off the newest episode of AtlantiCast. Also on this week’s show, check out the newest “hybrid” operating room at Morristown Medical Center and find out how Atlantic Health is helping local ...