In a special meeting held Tuesday afternoon, the Jersey City Council began deliberating on whether to leave the State Health Benefits plan as the health insurers for municipal employees.
Council President L. Harvey Smith described the meeting as a fact-finding effort to see if the city could save tax dollars by leaving its current plan and moving to one administered by Horizon-Blue Cross.
The New Jersey State Health Benefits plan covers municipal and state workers and is administered by Horizon-Blue Cross. The council will eventually decide if it wishes to move to a plan administered directly by Horizon-Blue Cross instead.
The first presentation was made by Ronald Manzo, president of the R.A.M. Insurance Agency, who was designated as the broker for the city. According to Manzo, leaving the State Health Benefits Plan and taking the policy he would broker with Horizon Blue Cross would save the city $2.4 million dollars. The city paid $34.6 million this year for employee medical coverage and Manzo estimates they would pay $32.2 million with his plan.
In the plan outlined by Manzo, benefits provided by the Horizon-Blue Cross plan would duplicate benefits provided by the New Jersey State Health Benefits Program.
"Participants would get an extended network of doctors and hospitals," said Manzo. "We have coverage that extends on national basis."
Manzo added that the premium rate for the city was guaranteed for one year and, if rates increased in the next above those charged by the State Health Benefits Program, the municipality could rejoin the State Health Benefits Program.
"There would be no penalty if the change were made because both plans have the same carrier," Manzo added. "The plan would cover all active and retired Jersey City employees."
Smith interrupted Manzo’s presentation with a request for a direct comparison of the State Health Benefits coverage and the benefits provided by the Horizon-Blue Cross plan. Smith said he had made request for a visual presentation of the information for the entire council to examine. Manzo apologized for not having the comparison information ready for the meeting, but reminded the council of a letter from Horizon-Blue Cross promising to provide "benefit levels which are equal to or better than the current plan and that there will be no loss in coverage levels by any covered employees."
Smith replied that it was necessary for the council and city employees to be able to compare the plans side by side. Smith then asked Manzo if the plan he was offering had COBRA coverage, which is an extension of employee medical benefits for a prescribed period after the employee has left his or her job. Manzo stated his plan would provide COBRA coverage for 18 months after leaving a position and would cost a flat 2 percent over premiums paid by the employee.
Councilman William Gaughan asked about claims filed during the transition period between the State Health Benefits Program and plan offered by Manzo. According to Manzo, there would be a 60-day transition period, after which Horizon-Blue Cross would work on claims made during the change over from medical policies.
Speaking for the State Health Benefits Program was Christine Service of the state’s Division of Benefits and Pensions.
"The plan without the State Health Benefits only mirrors the one plan," said Service. "There are other programs and five HMOs offered by the State Health Benefits Program."
Service said that re-entry into the State Health Benefits Health Plan after leaving was not as simple as Manzo stated.
"Re-entry is at the behest of the State Health benefits Committee," Service stated. "There is a 60-day waiting period for the municipality before it comes back into the program."
Service added the State Health Benefits Program had recently added Hudson County-area hospitals to its network, including the Meadowlands Medical Center and the Rahway Medical Center.
"We are planning to expand coverage to doctors and hospitals in Virginia," Service added. "We are already in Florida and the Carolinas."
Noting that Jersey City still owed $8.9 million on its bill for the year to its medical insurers, Gaughan asked if leaving the plan would affect the amount of money the city received in aid from the state. Service replied that if the municipality chose to leave the State Health Benefits Program, it would have to pay the $8.9 million balance. Service was not aware that there would be any reduction in state aid if the city left the program.
Bayonne Business Administrator Terrance Malloy testified to the council about his city’s leaving and then returning to the State Health Benefits Program. According to Malloy, Bayonne left the program in 1997 and went back in 1999.
"We thought we could have significant savings with the change," said Malloy, noting that in the first year of the switch, Bayonne saw a savings of $800,000.
"In the second year, claims rapidly rose," said Malloy. "The rates went up and we petitioned to go back to the State Health Benefits."
Councilman Steve Lipski asked Malloy if there had been any employee dissatisfaction with medical coverage before Bayonne made the change. Malloy replied that there was not and the switch to a different insurer was made in an effort to save money.
Representatives of municipal workers voiced their opinions on the proposed insurance changes. Joe Krajnik, president of the Jersey City Fire Fighters Union, expressed his concern about the lack of information provided by Manzo.
"Not one union is in favor of this plan," said Krajnik. "We don’t know today what their plan is. Where is their plan?"
Fire Officers Union President Wayne McCarthy stated his dissatisfaction, saying municipal employees had no way to compare the two benefit plans.
"I will not recommend this proposed plan to the retired employees," said Mike Samalon, representing retired Jersey City municipal workers. "There is no substance and no way to make a comparison."
Smith concluded the meeting by again requesting a comparison between the benefits provided by the State Health Benefits Program and those provided by Horizon-Blue Cross.