Saving a county nearly $3 million in additional taxpayer costs

Faced with the possibility of paying a 24% increase in health costs sought by the New Jersey State Health Benefits Program (SHBP), the board contacted employees from a Marsh McLennan Agency client to work out a lower-cost plan. At a meeting, the commissioners approved three resolutions for agreements. The agreements would represent union members and nonunion employees, restructuring the health plans offered.

Last year, the client budgeted $13.8 million for health insurance, which included a $1.4 million employee contribution. Taxpayers were charged $12.1 million to cover the cost of health insurance for the client.

A 24% increase could have added $2.9 million to the taxpayers’ share of the cost.

An administrator of the client said they decided to stay in the SHBP but modify the individual plans available.

The county contracted with us to manage the health reimbursement arrangement program with the goal of providing a higher-level healthcare program at a lower cost.

What is a health reimbursement arrangement (HRA)?

An HRA is a reimbursement account set up and funded by an employer to cover eligible healthcare expenses. An HRA is part of an employee benefit plan that is 100% funded by the employer.

Typically, HRA plan administrators will reimburse healthcare services like:

• Coinsurance expenses
• Deductibles
• Doctor's office visits
• Hospital services
• Prescription drugs

How we helped

Marsh McLennan Agency worked with a vendor to help the client get reimbursed for out-of-pocket costs. This included deductibles, copays, coinsurance, and prescription costs that employees would not have incurred if the client had stayed with the benefit program that offered higher initial benefits but at a much higher price.

This is just one example of how we partner with organizations to help them overcome obstacles.

Contact a consultant at Marsh McLennan Agency to discover how we can help you make more informed decisions regarding your healthcare plans.

Original publish date: 02/13/2024