Pequannock board warns of steep health‑insurance costs; midyear adjustment tops $1.09 million

Pequannock Township School District officials on Dec. 15 told the board they are confronting large, claim‑driven increases in employee health‑insurance costs that could reshape next year’s budget.

Mister Gibbs, the district business administrator, said several insurers issued “decline to quote” letters during the district’s request for proposals, citing unusually high prescription and medical claims. "For the two‑year period ... the prescription claims totaled over $8,200,000 with medical claims totaling over $12,000,000," Gibbs said. He added that the combined prescription and medical claims to premium loss ratio had reached about 151 percent.

Gibbs said two potential bidders — Cigna and PERMA/SHIFT — remained outstanding at the time of the meeting but cautioned that, given the loss ratios, those carriers might also decline to bid. He also told the board the midyear budget already includes a $1,097,000 adjustment for health insurance for 2025–26 and that health‑insurance costs are anticipated to increase roughly 18 percent for the 2026–27 school year.

District leaders and trustees described the pressure this places on operating budgets. Dr. Portis, the district principal, said the district is searching for solutions but criticized the absence of state‑level fixes: "I care more about solutions, and I'm not hearing about solutions at the state level," he said, urging broader policy changes to help districts cope with rising costs.

Board members discussed interim steps the district may take, including analyzing prescription‑cost drivers with its agent and exploring plan design changes without violating contractual obligations to provide benefits that are "equal to or better than" current coverage. Board members also noted the district will submit required midyear budget adjustments to the state by Feb. 1, 2026.

The board did not take any immediate policy votes on insurance design at the Dec. 15 session. Administrators said they would continue the RFP process, evaluate remaining bids, and report back to the board with options for cost mitigation and compliance with benefit requirements.