Let’s do the Math

The Annualized Southern Coastal Regional Benefit Plan (SCRBP/HIF) premium in the 2018 plan year was $3,800,000. The proposed renewal for 2019 by SCRBP/HIF was $4,000,000. The New Jersey State Health Benefit Plan (NJSHBP) premium for 2019 was $3,350,000 (including the $86,000 pharmacy penalty).
The difference in projected cost over the SCRBP/HIF renewal proposed was $650,000 that included the Rx penalty, HRA run out, consulting fees and contribution cost sharing concessions. Considering employees also contribute to the cost, the township is obligated to provide the most cost-effective benefit alternatives.
The NJSHBP projected cost in 2020 is projected to be less than $3,000,000; a great move for employees, retirees and taxpayers. The SCRBP/HIF had two renewal dates that caused budgeting challenges, July for pharmacy, and January for medical. Both plans had restrictions and limitations related to terminating the plan.
Considering the township would reduce overall benefit cost by more than $650,000, the renewal made sense, but the SCRBP/HIF was not willing to share claims experience. The move to NJSHBP was based on several factors.
The process was complicated and took six months to create. During this time, there were no less than a dozen meetings with leadership from all collective bargaining units, management, committee and retirees took place. The NJSHB representatives and the coastal SCRBP/HIF agents were given every opportunity to be competitive and address the multitude of service challenges experienced by township employees.
The dividend SCRBP/HIF returned is a return of premium. An excess premium, in fact, retained by the SCRBP/HIF and distributed at the will of the SCRBP/HIF Commissioners. Yes, the SCRBP/HIF is holding an estimated $1,000,000 of taxpayers’ excess premium.
These funds will be returned. Oddly enough, the township was presented with a 4.28% rate increase in 2019, while the SCRBP/HIF was holding over a million dollars in the townships’ reserve account.
Now, the township has the benefit of lower cost and access to the accumulated reserves, referred to as dividends.  The move made sound financial sense then, and eliminated the service challenges faced by our employees and their families.
The projected NJSHBP cost will be less than $3,000,000 in 2020, based on current enrollment. Considering the Coastal SCRBP/HIF wanted to charge over $4,000,000 in 2019, the reduced cost to the taxpayers is closer to a million dollars.
Thank you, Mike.
Ordered and paid for by CMCRDO, PO Box 12551, Wildwood, NJ 08260.