CAPE MAY – The City Council is continuing to refine its health insurance offerings for city employees, with a change to the health coverage option for Medicare-eligible retired employees.

Beginning Jan. 1, these individuals will move to the Hartford Group Retiree Insurance Plan I from a United Healthcare plan. There will be no change to the prescription drug plan for the same group of individuals, who will remain with the Scripps Medicare Pharmacy Drug Plan.

At the same meeting Oct. 21, the City Council approved renewal contracts with Delta Dental and Vision programs for all eligible employees. Mayor Zach Mullock noted that the two plans have no premium increases for the 2026 coverage year.

City Manager Paul Dietrich and Mullock both pointed to the city’s strong, positive loss ratio – a measure of how attractive a potential client might be to an insurer – which allowed the city to get favorable rates in the private sector insurance marketplace.

In October 2024 Cape May voted to withdraw from the State Health Benefits Program for local government employees. A series of double-digit premium hikes in the program led the city to seek the same or better care while saving taxpayer dollars.

Several other Cape May County municipalities also elected to leave the state plan in recent years, including Middle Township, Ocean City, Sea Isle City and Avalon.

Recently an attempt by Stone Harbor to leave the state plan did not result in acceptable private sector bids for the borough’s business due to a less favorable loss ratio among employees, driven mainly by heavy use of the prescription drug plan. The borough had to move to a different strategy within the state plan.

In May, a report from the New Jersey Department of the Treasury predicted that the state insurance program for local government employees was in a “death spiral.” Premium hikes for participating municipalities for 2026 have ranged from 37% to more than 50%.

Contact the reporter, Vince Conti, at vconti@cmcherald.com.