Mayor Ras J. Baraka announced today that the City of Newark is implementing a major enhancement to its employee health care benefits, by offering a Referenced-Based Pricing (RBP) model effective July 1, 2025. This strategic shift aims to significantly reduce healthcare costs while improving access, quality, and member support for City employees and their families.

The new plan leverages innovative repricing technology, member advocacy, and provider selection support to create a more transparent, efficient, and equitable healthcare system.

“The members of our municipal team are the power behind Newark’s transformation and we have a duty to care for our workers and their families,” Mayor Baraka said. “In doing so, we also are good stewards of our municipal budget and taxpayer money. I’m proud of the effort we made on this new model that empowers both the City and its employees to access high-quality care at fair, more affordable, transparent prices— and sets a precedent for municipalities across the nation.”

A comprehensive analysis of Newark’s 2023–2024 healthcare claims reveals substantial savings opportunities through the RBP model:

• Inpatient Care: Projected savings of up to 80 percent.
• Outpatient Services: Estimated savings of up to 92 percent.
• Professional Claims: Up to 85 percent savings.
• Total projected savings:$105,000,000, assuming a full migration of employees to new plan.

The blended projected savings across all claim types represent one of the most impactful cost-containment strategies available to self-funded plans today.

“This is a bold and forward-thinking move for the City of Newark,” said Tiffany M. Stewart, Human Resources Director for the City of Newark. “By transitioning to a reference-based pricing model through Care Empowered by Insurance Design Administrators, we’re not just controlling rising healthcare costs—we’re delivering a solution that prioritizes our employees’ health, safety, and financial well-being.”

Member Benefits and Support

The City’s new plan will just reduce costs and enhance the member experience:

• Lower Chapter 78 Contribution Rates: An employee earning $70,000 annually can expect to pay $198.36 per pay period towards their RBP healthcare plan saving them $129.58 per pay period ($3,369.08 annually), which is a 40 percent decrease from the City’s traditional plan.
• Balance Bill Protection: Members receive full legal representation at no additional cost to resolve any balance billing disputes.
• Concierge Support: MedWatch’s Pathways Concierge program provides one-on-one support for navigating benefits, scheduling, provider selection, precertifications, and billing inquiries.
• Utilization & Case Management: A team of clinicians ensures medical necessity, manages chronic and complex conditions, and provides early intervention to improve outcomes and reduce unnecessary costs.
• Disease Management and Preventative Care: Programs include lifestyle wellness, mental health support, biometric screenings, and 24/7 access to physician telemedicine.

Optional services like Teladoc and reinsurance management are also available to enhance care and risk protection. The city expects initial enrollment to serve a minimum of 1,500 employees, out of the city’s 4,000 workers and sees it as a viable resolution to financially distressed medical plans throughout New Jersey, such as the NJ State Health Benefits Program.

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