New Jersey Public Entities See Healthcare Savings by Using The Difference Card Solution with the SHBP

May 9, 2024

Difference Card HRAs lower payroll deductions and improve benefits in New Jersey

If you’re in the State Health Benefit Plan for New Jersey, then you’ve felt the pain of exorbitant health care costs increases over the past 18 months. You’ve paid almost 30% more for the same exact health insurance plan that you had in 2022.

There must be a better way to control healthcare costs. Meet The Difference Card, a game-changing Health Reimbursement Account currently being used by counties and municipalities throughout New Jersey.

So, who’s had success with The Difference Card to help control healthcare costs?

Let’s look into a few success stories below:

  • After The Difference Card received approval in 2023 to offer the HRA within the SHBP, Hunterdon County was one the first big entities to implement The Difference Card. They saved $3 million, reduced health insurance premiums by 24 percent, and eliminated copays and deductibles.
  • Closter Borough in Bergen County deployed The Difference Card this past year to offset the additional 6.4% increase from the SHBP.
  • The Township of Saddle Brook, also in Bergen County, has been making The Difference Card available for 10 years, and it has been a huge asset in finding ways to deal with the 2 percent cap on raising property tax and keep it from limiting benefits for PBA members.

How does The Difference Card work?

The Difference Card provides better benefits at a better price. The program offers lower payroll deductions, improved benefits, and a credit card to pay providers so copays and deductibles do not come out of pocket.

The Difference Card is a third-party administrator that sells its products through health insurance brokers. Employers are the customers, who provide and administer the benefits to the employees.

Members receive a Mastercard in the mail that they can swipe wherever Mastercard is accepted and is tied to the employer’s account. The card can be used for copays at doctor’s offices, pharmacies, and hospitals.

The Difference Card was founded in 2001, with the company’s mission to bring some of the concepts that big organizations and national companies were using to control healthcare costs and contributions for their employees to mid-market local entities. Now a national company, The Difference Card has clients in all 50 states and has helped thousands of employers create a more cost-effective healthcare plan.

Not just a card, members can search for providers and compare quality of care, shop for cheaper prescriptions and make better healthcare decisions. Reimbursements are issued quickly back to members, typically in under two business days.

“The Difference Card pays for all the out-of-pocket cost differences so that members and their families don’t have to pay,” confirmed Chris Calderone, the Chief Revenue Officer for The Difference Card. “It pays the out-of-pocket expenses, so you don’t have to pay copays or deductibles.”

What health insurance carrier works with The Difference Card?

Members in the SHBP still utilize Horizon or Aetna as their health insurance carrier. When the member is asked for a higher out of pocket cost, they can swipe their Difference Card Mastercard, funded by their employer, to bridge the gap.

Employers see savings by purchasing a plan with Horizon or Aetna with higher out of pocket costs, but a lower premium price point. This results in a premium savings on their monthly health insurance bill. The municipality or county then utilizes The Difference Card to cover the cost of any increased copays or deductibles.

The employer is then able to pass savings along to employees in terms of lower premiums or even salary increases, in some cases. The employee will then pay less for their health insurance with Chapter 78 contributions (24% less from the Direct 10 for example) so essentially, it’s a win-win for all parties.

“Instead of purchasing the $10 copay plan that you’ve been buying for 20 years, we buy this plan that does have higher copays, but it costs you 24 percent less,” Calderone explained. “So, the county gets the 24-percent savings, and the unions also get the savings because now their contributions, as dictated by Chapter 78, are based on the lower premium.” That savings can be as much as $4,000 a year. All members have to do is carry an extra Mastercard in their wallet, and it gives members free copays.

“And members love that we process claims very quickly,” Calderone added. “The card is automatically paying the claims for them, and if they forget to use the card and pay out of pocket, we’re still paying them back in two business days. Compare that to the insurance carriers that take sometimes two months to process a claim.”

See the Savings Achieved by The Difference Card

By the numbers, The Difference Card reports saving a public entity with an average of 145 employees more than $500,000 per year. Employees have saved an average of $3,467 per year.

Calderone noted that Saddle Brook saved more than $400,000 for its 150 employees, while Hunterdon saved $3 million for its 600 people using the program. And that’s without changing the plan or, more important to the members, the provider network. This allows premiums to be reduced back to 2022 prices, prior to the 21% premium increase in 2023, and 7% in 2024.

Those increases prompted the Borough of Closter to revisit The Difference Card, which had come across the table a few years prior. This time, Borough Administrator James Winter was able to bring his perspective from serving as an officer in Closter for 32 years. He even served on the executive board of Northern Valley Local 233 as treasurer and secretary for a few years while on the job. Winter realized how The Difference Card could ease some of the hurt coming from being fully vested in Chapter 78 and having to absorb those increases.

“The PBA was actually very forward. They came to us and said, ‘Hey, can we work together to look at different options for this?’” Winters recalled. “When we wanted to maybe switch carriers, we could not. Therefore, we looked at The Difference Card. We had them come in and speak directly to every single employee who was receiving health benefits here in town. And the PBA was very much on board.”

What resulted was the Borough being able to take a lower deductible plan. And taking two thirds of the savings to absorb the increases over 2022 while passing on one third of the savings directly to the employees. The proof of that for law enforcement officers, of course, is in the savings. Mayor White sensed that Local 102 members would be skeptical, especially if it would mean more paperwork or more difficulty in using the card.

That was not his experience.

“I would just put the money out, then fill out the paperwork and get reimbursed from The Difference Card, which was simple. I never had a problem,” he reassured. “Police are a tough group, and, at first, there were some complaints when we started. But then they subsided, and now rarely do we ever get any kind of complaints because the employees understand it. I was waiting for the other shoe to drop, and it hasn’t. So, it’s been proven here.”

To see if The Difference Card could work for your Borough or Township, reach out to your local Sales Consultant or request an RFP.

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