After a marathon session - but no angry protests - the council voted 5 to 2 to approve changing the carrier, assured by Oxford that coverage for employees would be "equal to or better than" the existing coverage provided by Horizon Blue Cross/Blue Shield.
"This is the first change in carriers we have had since the town started providing health coverage to its employees," said Mayor Dennis Elwell.
Although originally touted as something that will save the town as much as $1 million over the next two years, the new coverage will save Secaucus taxpayers about $500,000 because Blue Cross/Blue Shield made a last-minute counter offer to help avert the change.
The town currently pays in excess of $3.1 million in yearly premiums to provide its 224 employees, including police officers, with health benefits. In 1999, the town instituted a change in family coverage, which required newly hired employees to pay 35 percent of the total additional premium for the additional coverage.
Elwell said that for newly hired employees, this percentage would be reduced because of the change in carrier.
Many of the people who appeared to question the Oxford coverage were confused by a program currently offered by Oxford to the Secaucus school district employees. Under the school plan, employees are granted optional packages - either full or traditional coverage at one rate, or a "point of service" package at a lesser rate. The POS (point of service) package, however, has more limitations as far as doctors and services provided. In 1993, the Town Council sought to give town employees a similar choice package, but a staunch protest from employees voided the effort. In 1995, the council sought to switch carriers to Signa Healthcare, seeking savings, but it didn't come through because Blue Cross came up with a new proposal.
This time around, Michael Munoz, representing Oxford, said town employees will be receiving the traditional plan under the proposed change, and that it would fully equally or exceed Blue Cross coverage in every area.
"When this came up in 1993, the council voted to stick with the unions," said Mayor Dennis Elwell, who was a councilman then. "This agreement provides the same coverage or better as Blue Cross/Blue Shield." During a later interview, he added, "We have been involved in this process for over three months, and have met with many in personnel. We offered to talk about their concerns in private. Only a handful of people came in to talk."
Elwell said the Town Council deviated from its usual format in passing such a proposal by allowing the public to make comments before the vote. He also said the town allowed a consulting firm retained by the Policemen's Benevolent Association (the officers' union) to issue an initial report.
"It did not criticize Oxford," he said.
At the council meeting, however, the PBA pleaded for more time, saying the first report was the result of a questionnaire conducted among its membership, not a study. They said a more extensive study of the two plans was due out within a few days, and asked for the council to delay the vote.
Attorney Frank Leanza said such a move would be up to the mayor and council, but an effort by Councilmen John Bueckner and Robert Kickey failed, and the vote was taken despite the police union's request.
While Elwell said an agreement with Oxford would allow the town to make changes if the police union's report showed some deficiencies in the new plan, he said waiting longer to implement the new plan would cost the town about $30,000.
Bueckner and Kickey disputed this, and said the Town Council could call a special meeting at any time to pass the new insurance plan.
Elwell, however, called the request "a delaying tactic" designed to help intimidate the council into backing down over the change.
Politics involved?
Both Kickey and Bueckner suggested a strong political motivation for the hurried need to change carriers. Ron Manzo, the town's broker for insurance coverage and a significant political contributor to the Elwell campaign, will benefit hugely from the change. While Manzo claimed the change would hurt his dealings with Blue Cross Blue Shield, he also admitted that his fee for the change would be hefty, from 1.2 percent of the total policy cost with Blue Cross to 5 percent a year from the Oxford deal.
"While I have no objection to Manzo making money, I would have liked to have had Blue Cross representatives at our meetings to explain their side," Kickey said.
Manzo has been criticized in the past for his connection to Hudson County political figures, and last year, the Secaucus Board of Education resisted requests from the mayor's office to re-examine their decision not to use Manzo as their broker, after interviews were done with various potential contractors.
Kickey pointed out the fact that a recent political fund-raiser for the mayor was held at a banquet hall owned by Manzo.
When Kickey asked if Manzo had looked at insurance carriers other than Oxford, Manzo said in his "expert opinion" he knew of no other carrier that would supply the same coverage, so he had not bothered seeking out addition carriers.
Town Administrator Anthony Iacono, however, said the town had sought out other carriers over the last few years.
"Last year we looked at United Healthcare," he said, "and they could not provide the same coverage."
Although Iacono said Blue Cross first proposed an 18 percent increase this year and lowered the increase to 12 percent once the town began looking at Oxford, Kickey said this may not have been the case.
"I talked with our representative in Blue Cross," he said. "She told me the increase proposed originally was 12 percent."
In selling the change to the public and to the other members of the Town Council, Elwell said the cost savings were significant.
But Kickey and Bueckner said the savings may be lower than projected, noting that the new contract with Oxford locks the town into an 18 percent increase in 2004 - the same amount town officials objected to paying Blue Cross. Kickey said that while Oxford will generate about $321,000 in savings this year, next year Blue Cross and Oxford could break even, or even cost slightly less for Blue Cross.
When asked by several town employees why the town had to make the switch, Frank Leanza said the Town Council had sought out bids and under state law was required to go with the lowest.
Bueckner and Kickey, however, disagreed sharply with the ruling in later interviews, saying their research showed numerous exceptions to this policy under the state's Professional Service Contract provision. "Secaucus has hired a lot of professionals without bids, and these did not always go to the lowest quote," Bueckner said.
Equal or better?
One provision questioned sharply by employees was the "equal or better" clause in the Oxford contract.
Munoz said Oxford had given the town a letter to provide the same level of coverage on every item, or better service than Blue Cross currently provided.
Several employees questioned total doctor coverage in and out of the state, and Munoz said Oxford had agreements with various providers that roughly equaled the Blue Cross network.
When several employees suggested doctors were dropping out daily from the Oxford plan, Munoz said company studies showed doctor participation increasing, and that to every 3 doctors that dropped out, 10 were joining.
Town employee Tom Keegan, however, said, "My doctor has dropped out and that's what's important to me."
Sharon Catolla said she had talked to teachers under the Oxford plan, noting that many of their doctors had left the plan. She said they said that delays in repayment of out-of-pocket expenses could take up to three to four weeks.
"I've been told that the paperwork is horrendous," she said. "This is true in the prescription plan."
Representatives from the PBA and other town employees said because many of their current doctors will not accept Oxford, the employee will have to pay these doctors themselves and wait on reimbursement. Iacono said that estimates for reimbursement show Oxford repays such clients within 14.9 days on the average. Town employees say Blue Cross claims are handled on the same day as transaction with no lag time. "We handle millions of transactions," Munoz said. "Of these, we deal with 99 percent without problems. Some cases may fall through the cracks."
Munoz said Oxford and the town had several steps to take to approach this. If a doctor does not currently accept Oxford, the insurance company would seek to bring them on board. If the doctor still resists, then Oxford will offer to pay the doctor directly for the service. If the doctor still resists, Elwell said, the town will have a fund from which an employee can draw a check.
"We will pay the bill and the town will collect the reimbursement," he said.
This fund, Elwell said, would handle the extraordinary claims medical procedures sometimes cost, fees in the thousands of dollars that employees might not be able to deal with.
Not everything is equal
Elwell said a committee would be formed to handle any problems employees might have during the transition from one carrier to the other, and said the town has a 30-day withdrawal clause in the contract with Oxford. The town also has a letter from the company saying it would equal or surpass anything Blue Cross offered, even if the police report finds something unexpected.
Alice Ionelle, a town worker, however, questioned the process of town payment, asking if an employee had to report medical problems each time she wanted reimbursement, noting that the hospital she takes family members to wants payment up front.
Dawn McAdam she had called Oxford's information line and was not assured of any of these guarantees. But Munoz said this was a different agreement with the town.
Annette Zych said that with Blue Cross, employees did not have to go through a lot of red tape to get claims processed, something that may not be true with Oxford.
Elwell said the expected lower costs of the Oxford plan might allow the town to lower the fees for family coverage it has imposed upon newly hired employees since 1998.
Under this requirement, new employees hired since 1998 would still get the full insurance coverage free, but had to pay 35 percent of the cost for additional family coverage premiums. Elwell said this could be lowered to 10 percent under the new program and that the numbers would go down for employees because the cost to each employee is based on the total cost of the policy to the town.
Officials said that the Oxford policy also goes beyond Blue Cross in several areas. Firstly, it covers children under the family plan up to 23 years old without needing to prove that these children are attending school. The new plan provides hospice care that the old plan lacked, and reimbursements for health club fees.
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