Facing Cost Increase, Central Changes Insurance

Photo by Chris Lundy

BERKELEY – The Central Regional School District was quoted a double digit insurance increase for 2018, so officials said they are switching plans that will bring less of an increase.

Central had been with the School Employee Health Benefit Plan since 2009, business administrator Kevin O’Shea said. That plan announced a 13 percent increase for 2018.

The writing was on the wall since the spring, he said, when a financial review of the plan revealed a very low amount in reserves. Additionally, large districts like Newark and Elizabeth had opted out. These were seen as red flags that the rates would go up to make up for these issues. Officials asked their broker, Conner Strong & Buckelew, to shop for better rates.

They received a better rate from Horizon. It would still be an increase, but not as much of one. The SEHBP cost for 2018 was projected to be $4.9 million. The Horizon offer was $4.6 million. Since Horizon also has a less expensive plan option for employees, there could be further savings.

All of the doctors that employees use now are in the new plan, O’Shea said.

“Medical coverage for our employees is a major cost factor in our budget as it represents the second largest budget item behind salaries. Our employees currently pay anywhere from 3.5 percent to 35 percent of their healthcare costs,” he said. “Currently most employees at Central Regional have a plan that offers a $15 co-pay for regular doctor visits and a $25 co-pay for specialist visits.”

During the most recent Board of Education meeting, the district’s New Jersey Education Association representative, Mike Mannion, asked the school officials to remedy the “adverse effects” that some of the employees would experience.

There were about 16 employees that would have issues, and they will be addressed, O’Shea said.