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Essex County freeholder board backs broker over health contract - NJ.com
ESSEX COUNTY — Here’s the $10 million question: Did Essex County get better health insurance benefits for its money, or did it benefit a political ally?
State Comptroller Matthew Boxer says Essex County could have saved slightly more than $10 million in 2009-10 had it opted for the state health benefits plan.
But the Essex County freeholder board disagreed with Boxer’s findings and last week voted 7-0 to stay the course with its broker, Conner Strong & Buckelew. The board, minus freeholders Donald Payne Jr. and Leonard Luciano, approved a three-year $675,000 contract with the Marlton firm.
Conner Strong & Buckelew is headed by George E. Norcross, perhaps the most prominent name in the state’s insurance business. Norcross is also a southern New Jersey Democratic power broker who is an ally of Essex County Executive Joseph DiVincenzo.
"For 14 years, Conner Strong has provided comprehensive service to Essex County. Their expertise in the insurance field has benefited Essex County employees through the health care coverage we have received," said Anthony Puglisi, a spokesman for DiVincenzo.
But to critics of the contract, like union chief David Weiner, the deal with Conner Strong is simply political.
"This contract stinks all the way through," Weiner, president of Communication Workers of America Local 1081, said after Thursday night’s vote.
Weiner also contended the firm’s refusal to answer three key questions in the county’s requests for proposals should disqualify Conner Strong from being awarded the contract.
However, the Democratically controlled county administration had only praise for the firm. The approved contract even included a new element — allowing Conner Strong to serve as the broker for voluntary benefits such as car and homeowners insurance. County administrators said that would not increase overall costs.
County Administrator Ralph Ciallella called Conner Strong’s work "outstanding."
Boxer’s two-year audit found Essex could have saved $9.5 million if it had opted for the state health plan in 2009-10. Also, under the state plan, the county would not have incurred $750,000 in insurance broker fees during that period.
Last year, Essex paid Norcross’ firm more than $400,000 in broker fees, according to Ciallella.
That means more money coming out of the pockets of county employees, according to Chris Tyminski, president of Policemen’s Benevolent Association Local 183, which represents sheriff’s officers.
Tyminski said in his 16 years heading the union, his local has not been asked to consider the state health plan.
Weiner said county officials meet with his union once a year to discuss the state plan "after the vendor has been chosen, so we have no say."
"The unions are going to be looked at like the bad guys," Tyminski said, if members think they didn’t get them the best price.
Insurance brokers have no financial incentive to select the state health plan, Boxer said in the report. They score hefty commissions when they secure private insurance but receive no money if local governments join the state plan.
But the comptroller also said local governments don’t do enough to evaluate costs and benefits themselves.
"Government officials selecting a health plan for their employees must make sure that their allegiance is with local taxpayers, not with special interest groups," Boxer said in the report.
Joseph DiBella, vice president at Conner Strong, assured the freeholders the firm vets the state plan each year. And if there are savings, he said, "we have an inherent fiduciary responsibility to recommend that plan."
But Freeholder Brendan Gill wants the county to take more action. After the vote, he said the freeholders should adopt an ordinance that requires the insurance broker to solicit a price quote from the state health plan or a joint insurance fund plus three other vendors. That practice, Gill said, would increase transparency in the process.
"Ultimately, my hope is that the county will realize the savings that the administration has promised," he said.
Freeholder President Blonnie Watson said she would refer Gill’s suggestion to the board’s insurance committee. Gill said he plans to get the ordinance passed at a future meeting.
Two counties serviced by Conner Strong recently joined the state health plan. Gloucester County switched in May and Camden County will start in September.
When freeholders asked why not Essex, representatives from the firm and county administration cited both the large number of county workers and 26 collective bargaining units that would have to negotiate changes in coverage.
"It’s not a cookie-cutter model," said Tammy Brown, senior vice president and managing director at Conner Strong.
But Weiner said he plans to challenge the contract.
"No one answered my points about Conner Strong refusing to answer three questions on the RFP (request for proposal)," he said after the vote. He questioned why the firm, on its proposal, refused to list bank references, its past contracts and its most recently reviewed financial statement.
Weiner said he believes the contract isn’t valid.
"They disqualify vendors all the time if they don’t comply with the RFP," he said.
Related coverage:
• Essex County freeholders unanimously OK insurance brokerage contract
• Essex County freeholders to vote on renewing contract with insurance broker
• Local governments stand to save millions by opting in to N.J. health plan
Source: www.nj.com
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