Union County Health Broker Recommended Plan that Cost an Extra $5 Million but Kept Broker Fees Flowing

On  Thursday evening, February 21st, representatives of Union County employee unions (CWA and IFPTE)  and interested citizens including representatives from the Citizens Campaign will show the Union County Freeholders that they needlessly spent at least an extra $5 million (12%) on employee and retiree health care by relying on a misleading report from their health insurance broker, Brown &  Brown.

The awarding of the employee/retiree health insurance business to Horizon rather than the State Health Benefit Plan (SHBP) allowed Brown & Brown to continue to collect commissions of approximately $800,000 per year.

In April 2012 Brown & Brown provided an analysis of the costs of proposed health insurance plans for County employees and retirees for the fiscal year July 2012 through June 2013.  Brown & Brown found that the lowest cost for medical care would be from the State Health Benefit Plan at approximately $42 million.  The next lowest bid was from Horizon at $47 million.

However, in what appears to be a transparent attempt to manipulate the contract award process, Brown & Brown added some $7 million to the estimated cost to the State Health Benefits Plan in "runout costs" from the previous health plan (Cigna).

The County was required to pay these "runout costs" regardless of who they chose as the new health insurance carrier but these "runout costs" were only added to the estimate of the costs of the State Health Benefits Plan falsely making  the estimated costs of the State Health Benefits Plan higher than Horizon.

In Union County, as in many other jurisdictions, the County does not pay their insurance broker directly, rather letting the insurance carrier pay the broker a percentage of the health insurance premiums paid jointly by the County and County employees.

However, the policy of the State Health Benefits Plan is not to kickback or reimburse health insurance brokers.  If Union County had opted to save at least $5 million by joining SHBP, Brown & Brown would have lost approximately $8oo,ooo in commissions.

We have extensive documentation that tells this story that we can gladly make available to the media and press publications.  I can be reached at cwadudley@aol.com, office phone - 609-434-1032 and cell phone - 215-380-5331.  Local spokespersons for CWA and the Citizens Campaign are also available.

Dudley Burdge