Flemington‑Raritan board hears brokers warn of steep health‑benefit cost pressures

At a Feb. 9 special meeting, the Flemington‑Raritan Regional School District heard from Jim Finn of Brown and Brown Insurance Brokers about a rapid rise in employee health‑plan costs and limited local options to blunt the shock.

"We've seen the last two years an increase in that metric of 33.9%…and in the most recent data, 28.5%. So, when you compound that, that gets us to over 60% in less than two years," Finn said, summarizing 36 months of claims data for the district. He said the district’s July 1, 2024 move from self‑insured to fully insured likely avoided roughly $3 million in claims costs this school year.

The broker outlined long‑term headwinds — hospital consolidation, high utilization of specialty drugs (including GLP‑1 medications), higher hospitalization and reimbursement rates — and a set of recent shocks in New Jersey’s market, including steep mid‑year increases in the state plan. "There's really no opportunity at the bargaining table until December 2027," Finn warned, citing Chapter 44 as a statutory constraint on plan redesigns.

Miss Dawson, the district’s business administrator, introduced the session as "a conversation about the current state of our district's health benefits and the significant cost pressures we are facing as we prepare for the 2026–27 budget," and stressed the presentation was not about blaming employees.

Finn said Brown and Brown revised its December renewal estimate from about 27.5% to roughly 35% and that Etna has agreed to provide its renewal figure by March 12. He also said Etna will assign a medical director for a March 18 review of the district’s population to recommend programs (for example, virtual musculoskeletal care) designed to reduce future claims.

As an immediate market strategy, Finn described a possible split of medical and pharmacy: if Etna allows a pharmacy vendor (named in the presentation as Benard) to handle prescriptions while medical stays with Etna, the district could see a "potential 7‑figure" savings on renewal math, subject to an "equal to or better than" legal test.

Board members pressed the brokers on procurement practices and frequency of solicitation. Finn said New Jersey regulations (A5 accountability) require districts to market health plans at least every three years; Brown and Brown has been marketing the district’s plan annually because of market volatility.

Finn framed the broader choices as unpalatable tradeoffs: remain self‑insured and risk very large claim exposure, enter the state plan (which recently imposed a large mid‑year increase and currently appears costlier for this district), or find a carrier or pool willing to accept the district’s experience. He urged caution in forecasting but said "we are reaching a crescendo" in market pressure while acknowledging uncertainty about whether increases will moderate soon.

Next procedural steps the board was given: expect Etna’s renewal figure on March 12 and a March 18 meeting with Etna’s medical director; Brown and Brown will continue marketing the district’s programs to other carriers and evaluate a pharmacy carve‑out if legal counsel and the "equal to or better than" test permit it.

The board did not take a formal vote on benefit design at the meeting; it moved into an executive session later the same night to discuss personnel matters.

Provenance: presentation and Q&A with Jim Finn and Mary Muscarella (Brown and Brown) and questions from board members, SEG 149–678, SEG 684–769, SEG 860–1004, SEG 594–678.