Freeholders Approve $37.5M in Employee Insurance Contracts

The freeholders approved $37.5 million in employee insurance and prescription drug contracts Thursday.

The five agreements passed unanimously during the board’s regular meeting at the building in Freehold included a $34.4-million contract with Medco Health Solutions for prescription drug coverage.

“The five benefit-related contracts have a total spend over the next three years of $37.5 million. However, the good news is those contracts include a savings of $18.2 million over the next three years,” said Benefits Coordinator William McGuane.

The Medco agreement extends an existing service contract approved in 1995. The term of the agreement will run from Jan. 1, 2012 through Dec. 31, 2014. About 24,000 people are covered under the Medco plan, according to McGuane.

The freeholders also approved a one-year, $2.87-million contract with Meridian Occupational Health for the county’s occupational health costs. 

“Meridian is the only provider we can rely on in the county. They’re a good logistical match,” McGuane said. “We only spend about 36 cents on the dollar because of that contract with Meridian. Project that out over three years and you’re looking at about $11 million savings. It’s a good contract. It’s a good partnership.”

In addition, Insurance Administrator of America will administer county employees’ health plans as part of a $686,692 contract lasting through Aug. 31, 2014.

The freeholders also approved a resolution extending the county’s employee-funded dental plans with Horizon Healthcare Dental through Sept. 30, 2013. A contract with Winston Financial Services on employee-funded life and disability insurance services was extended through Sept. 30, 2014.

McGuane said the projected savings the county expects to realize includes $13 million in provider discounts and $4.5 million in drug manufacturers’ rebates.

McGuane advised the board against jumping providers because of potential changes in coverage dictated by state and federal regulations.

“We need to be associated with vendors that have the intelligence and the ability to pivot quickly with legislative change,” he said. “The affiliations we have are extremely important to the county to make sure that we’re positioned well with ethical vendors.”