Newark mayor urges council to save on health care costs

By Karen Yi | NJ Advance Media for NJ.com
on January 04, 2017

 

 

NEWARK - The city council will decide Thursday whether to contract a Jersey City-based health insurance broker for $195,000 to oversee benefits for Newark's 3,300 employees.

Business Administrator Jack Kelly said the move was key in transitioning the city to a self-insured health plan that would save about 10 percent on the city's $105 million in health care costs. Health care costs make up about 16 percent of the city's $650 million budget, he added.

"Many people will tell you in the industry because you have so many employees that you're covering, you should self-insure and assume that risk yourself," Kelly said.

The council will decide whether to approve a one-year contract for Frenkel Benefits, LLC. The city previously contracted Brown & Brown as its health insurance broker.

During a pre-meeting conference Wednesday Mayor Ras Baraka pushed his self-insurance plan before the council.

"It's not a problem you created, a problem we created, it's a problem that we have," Baraka said of rising health care costs. "We have to save money on health care and I need the council's help to make it happen."

Under a self-insured health care plan, the employer, in this case the city, assumes financial risk for providing benefits to its workers.

The council will meet Thursday at 12:30 p.m. on the second floor of City Hall at 920 Broad Street.

Do you like this post?

Be the first to comment