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Passaic’s no-bid health-plan contract renewal lists three prices for one year, including $4M in the clause that authorizes it
JERSEY INTEL EXCLUSIVE
Passaic County commissioners are scheduled Tuesday night to renew the company that administers the county’s self-insured employee medical plan, without public bidding. The resolution on the agenda gives three different prices for the same one-year contract, and the highest, $3,999,624, is to the dollar the three-year total the board approved for the same company in 2023.
Photo: Passaic County Court House, Paterson. Farragutful / Wikimedia Commons, CC BY-SA 4.0. Figures: Passaic County file 26-1037 and Resolution R-23-1211. Infographic: Jersey Intel.
- What we know: Item 21 on the Oct. 13 agenda (file 26-1037) would award Meritain Health, Inc. a one-year contract, Jan. 1 to Dec. 31, 2027, to administer the county’s self-insured medical plan. One clause caps it at $1,469,808.00, spelled out in words as $1,469,888. The clause that actually authorizes the award caps it at $3,999,624.00.
- Why it matters: $3,999,624 is exactly the total of Meritain’s 2024–2026 three-year contract (R-23-1211). As written, the new resolution authorizes that much for a single year, about 2.7 times the other figure. Even the lower price is 10.2% above the $1,333,208 a year the county agreed to pay for 2024–2026.
- What’s next: The board meets at 5:30 p.m. Tuesday, Oct. 13, at the County Administration Building, 401 Grand Street, Paterson. The item is proposed, not adopted. The board can amend it, table it or pass it as written.
Three numbers in one resolution
The resolution, introduced Oct. 9 and recommended by County Administrator Matthew P. Jordan, awards the contract under N.J.S.A. 40A:11-5(m), the exemption that lets counties negotiate insurance and related consultant contracts without advertising for bids. It says the matter was discussed at the board’s Sept. 30 Administration and Finance Committee meeting, and that the price follows a renewal proposal from Meritain dated Sept. 1, 2026.
The WHEREAS clause describing the award sets “a total amount not to exceed one million four hundred sixty-nine thousand eight hundred and eighty-eight dollars ($1,469,808.00).” The words and the numerals differ by $80.
The RESOLVED clause, the part of a resolution that actually authorizes the action, describes the same one-year term, “commencing January 1, 2027 and expiring December 31, 2027,” but sets “a total amount not to exceed three million nine hundred ninety-nine thousand six hundred twenty-four dollars ($3,999,624.00).”
Jersey Intel could not determine from the posted documents which figure the board intends to approve.
Where $3,999,624 came from
On Dec. 28, 2023, the board adopted Resolution R-23-1211, awarding Meritain a three-year contract for 2024 through 2026 “in an annual amount not to exceed” $1,333,208.00, “for a total contract amount not to exceed” $3,999,624.00. The new resolution’s authorizing figure matches that three-year total to the dollar. That suggests it may have been carried over from the 2023 resolution, but the agenda does not say so.
The 2023 file on the county’s Legistar site includes Meritain’s fee schedule (Schedule A) and the finance director’s certification that $1,333,208 was available. Schedule A priced administration at $32.75 per employee per month for 3,456 employees, less a $25,000 yearly wellness allowance, with the rate guaranteed for three years. It also listed the plan’s expected claim liability at $60 million a year. That fee schedule carried the heading “Re-Bid Administrative Services County of Passaic Self-Insured Medical Plan, Project RFQ-24-058,” a county request for qualifications.
The 2027 file, as posted Tuesday morning, contains only a cover page and the resolution. The resolution says Meritain’s business entity disclosure certification, its Russia/Belarus certification and the chief financial officer’s certification of funds are “attached hereto,” but none of them appears in the posted file. Neither does the Sept. 1 renewal proposal that sets the price.
A 10.2% increase
Even at the lower figure, $1,469,808, the 2027 price is $136,600 more than the $1,333,208 annual fee in the expiring contract, a 10.2% increase. The posted documents do not say whether the per-employee rate rose, enrollment grew or services were added.
Nothing in the documents indicates wrongdoing by Meritain or the county. State law bars insurance companies doing business in New Jersey from making political contributions, a point the resolution itself cites.
Questions the documents raise
- Which amount is the board approving: $1,469,808, $1,469,888 or $3,999,624?
- Will the resolution be corrected before the vote, and will the corrected version be posted?
- What per-employee rate and enrollment does Meritain’s Sept. 1, 2026 renewal proposal use, and why did the price rise 10.2%?
- Why were the proposal, the certification of funds and the disclosure forms left out of the posted file, when the 2023 file included the fee schedule and funding certification?
- Did the county seek competing proposals for 2027, as the RFQ-24-058 heading on the 2024–2026 fee schedule suggests it did then?
Going Tuesday? The commissioners meet at 5:30 p.m. at 401 Grand Street, Paterson. Ask about item 21 (file 26-1037), record the discussion if you can, and send video, notes or documents to jerseyintel@gmail.com or Tip Us. Jersey Intel will report what the board adopts once the resolution or minutes are posted.
Related: Passaic’s 2024 paving contract closes out 22.7% over bid after six change orders, also on Tuesday’s agenda.
