Healthcare Costs Take a Bite Out of Brick's Budget
Township will pay over $11 million this year
The township will pay over $11.3 million in health insuance premiums this year, according to a proposed budget.
That figure – $11,386,853, to be exact – represents about 13 percent of the entire operating budget for the township, according to a spending plan proposed by Mayor Stephen C. Acropolis.
The mayor has said that despite having fewer employees on the township's payroll – he has proposed cutting an additional 77 workers this year – health insurance costs have risen rapidly and represent one of the largest items in the budget.
As recently as 2009, the township spent $9,081,700 on its employee group health policy according to that year's municipal budget, over $2 million less than the 2012 budget anticipates.
Business Administrator Scott Pezarras told Brick Patch that the township provides health insurance policies for about 1,250 active and retired employees.
But despite a trimmed-down active payroll, existing collective bargaining agreements have limited the savings the administration could have realized because the township cannot simply solicit bids and contract with the lowest-cost provider.
Pezarras said Brick has left the state's health insurance program and, in theory, could find better deals now that it is self-insured. But the existing contracts demand plans equal to or better than the old state plan, even though the state's coverage has since been scaled back.
"You can't just unilaterally change something when you're dealing with collective bargaining agreements," Pezarras said. "Since we left the state health benefits plan, the benefits have lessened. Now, I can't just unilaterally impose that [on employees], I'd have to bargain that."
The health insurance plan requirements included in the collective bargaining agreements are sufficiently generous to make it difficult to find providers, Pezarras said.
Adding to the pain is the fact that the overall cost of health care is on the rise.
"Health care costs are up because the premiums that we're getting, and the claims we're paying out, are escalating because the cost to provide health care is escalating," Pezarras said.
The administration is currently in the process of hammering out an agreement with the Transport Workers Union. That organization filed a grievance against the administration last week over a proposed layoff plan, saying the layoffs are meant to coerce give-backs during negotiations.
There are no easy answers. Acropolis' plan would slash the township's payroll, but at a cost of the public works department and the services its employees provide, such as solid waste and recycling pickup.
Pezarras said at a council meeting Feb. 21 that the township will not be able to solicit more competitive bids for employee health insurance unless the next round of collective bargaining agreements include changes.