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Brown & Brown warns Little Egg Harbor Township of steep health-insurance costs, recommends 20% budget increase
Summary
At the board meeting, Mike Morrow of Brown & Brown told the Little Egg Harbor Township Board that rising specialty-prescription and a few very large medical claims drove a sharp increase in the district’s loss ratio and recommended a conservative 20% health‑insurance budget estimate while the district awaits Blue Cross renewal numbers.
Mike Morrow, a broker with Brown & Brown, told the Little Egg Harbor Township Board of Education that the district’s health‑insurance costs are rising sharply and urged the board to budget conservatively for next year.
“We’re recommending a new budget number of 20%,” Morrow said, citing a combination of large medical claimants and rapidly rising prescription costs. He told the board that through November the district had about $400,000 in paid claims tied to GLP‑1 weight‑loss medications and that figure rose to roughly $460,000 in December. “Those GLP‑1 weight‑loss drugs are now accounting for about 26% of your overall spend,” he said.
Nut graf: The briefing arrived during budget season and followed Brown & Brown’s review of the district’s first 11 months of claims, which the broker said produced an unusually high loss ratio. Morrow recommended a 20% budget estimate while the district awaits renewal figures from Blue Cross, scheduled for a meeting a week after the briefing.
Morrow walked trustees through the district’s recent insurance-market history and the drivers behind current cost trends. He said the district’s first 11 months ran near a 99% loss ratio with the last six months trending higher; prescription costs were the biggest outlier. On the medical side, he said six members with claims of $75,000 or more accounted for about 17% of total claims.
On specialty prescriptions, Morrow described two trends that he said are hitting many New Jersey school districts: high‑cost specialty medications (some running tens of thousands of dollars) and the rapid adoption of GLP‑1 drugs for weight loss. “Every single fill is about $1,500,” he said of GLP‑1 prescriptions. “This is $400,000 that did not exist in your claims history a year and a half ago.”
Morrow said Brown & Brown solicited quotes from other carriers but several declined to quote given the district’s claims performance; he also noted a new Horizon public‑sector health insurance fund launched Jan. 1, 2025, and said his firm would ask that fund to review the district’s claims. He said a scheduled meeting with Blue Cross would provide the district’s initial renewal numbers and give a clearer picture of next‑year costs.
Morrow also reviewed the district’s waiver program. He said 74 employees currently waive district coverage and that removing the financial incentive entirely could, in a worst‑case scenario if all reenrolled, add about $1,600,000 in cost to the district (after employee contributions). He framed that as a modeling result and offered to share an interactive spreadsheet the district could use to test outcomes.
Board members asked clarifying questions about whether retirees or pre‑Medicare employees were included in the high‑claimant totals and about benchmarking against other districts. Morrow said the high medical claimants were active employees and that prescription trends were broadly consistent across the firm’s client districts.
The briefing concluded with Morrow’s procedural recommendation: adopt a conservative 20% budget assumption now and revisit once the carrier provides renewal numbers. The board said it would consider the renewal figures when they became available and follow up at the appropriate business‑office meeting.
