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State grant to fund setup of Niagara health insurance consortium

SOMERSET – A $225,000 state grant will help more than two dozen municipalities set up an employee health insurance consortium, Somerset Supervisor Daniel M. Engert said Friday.

The grant, announced Thursday by the Regional Economic Development Council, will be used to pay legal and other costs connected with setting up a common purchasing plan for the member localities, which they hope will save them money on health coverage for their employees.

Engert, who has been spearheading the effort to create such a consortium for the past couple of years, said a consultant is expected to deliver a separate financial feasibility report to each prospective member shortly after Jan. 1.

The 26 participants include all the cities, towns and villages in Niagara County except the City of Niagara Falls.

The members include the county government; the Barker and Royalton-Hartland school districts; the county Water District; the Orleans County towns of Barre and Kendall; and the Niagara Falls Housing Authority, although Engert said there is a legal question on whether the housing authority is eligible to join forces with the others for the purchase of health insurance.

The feasibility studies were carried out for free by Arthur J. Gallagher & Co., a consulting firm that hopes to be named to administer the consortium, which is when it would begin charging a fee.

“That grant money funds attorneys, the consultants, who will continue to be Gallagher throughout that process, an actuarial component,” Engert said. The creation of the consortium requires approval from the state commissioner of financial services. “There’s a fairly significant amount of work that still needs to be done,” he said.

Even if the reports say joining the consortium makes financial sense, each would-be member still has to make its own decision.

State law requires 2,000 employees to be represented by any health insurance consortium. Niagara County, which has the most employees of any of the prospective members, is a key to making the consortium effective, and the choice is up to the County Legislature.

“It’s not my call whether we’re in or not,” County Manager Jeffrey M. Glatz said Friday.

“In order for the consortium to be approved, there needs to be adequate reserves in place,” Engert said. Each participant would be assessed a share, depending on the number of employees to be insured.