From helping companies choose the best health care benefits packages, to providing recycling advice and services so towns and business can avoid stiff penalties, some New Jersey firms are working overtime to save money for their clients. NJBIZ spoke with two of them about how they go about their work.
After a decade-long career in the insurance industry — working for companies that included Allstate and AmeriHealth — Matthew Riddick had an epiphany that spurred him to launch a health-insurance consulting practice.
“I was speaking with a relative — who’s in their mid-20s and had selected a health insurance plan from their provider basically at random — and was now complaining about the high premiums,” he said. “I realized there had to be a better way.”
Riddick, a New Jersey-licensed health and life insurance producer, took the plunge in May. “I’m still fairly young, 31, and don’t have any family obligations,” he said. “So, I figured if there’s a time to do this, it’s now.”
There’s plenty of opportunity, he added, noting that “a lot of consumers will get their health plan policies from their employer, who may offer an array of options. But many people don’t have a clue about what differentiates each plan, and they basically go at with an ‘eenie-meenie-minie-moe’ ap-proach.”
Because he operates on a fee-only basis, “I’m not a broker and I’m not beholden to any particular insurance company or plan,” according to Riddick. “I just sell a service, not a product. My initial target market is businesses — which generally pick up at least part of the cost for their employees’ premium — and individuals in the North Jersey market.”
When he works with small-business and other owners, Riddick finds out about issues like employee demographics, and what their job responsibilities include, which he said enables him to make reasonable, cost-effective recommendations.
“It’s about finding a balance between something that’s economically sound for the business, while providing coverage that makes sense for employees’ needs as well as their premiums,” he said. “I recently advised an independent sports retailer in North Jersey with about 15 employees who range from 25 to 45 years old. After working closely with the owner, I was able to suggest an approach — which included workers compensation and disability policies — that cut the business’ costs by about $5,000 a year while delivering quality coverage to the employees.”
Why is choosing a policy is so complicated?
“You have to navigate multiple issues,” he noted. “There are many industry terms and legal language that employers don’t understand — let alone employees — and then you add in issues like deductibles and co-insurance, and it can become very confusing very quickly. Then there’s the whole matter of coverage options: will you be covered for a possible major procedure?”
One of the biggest issues, of course, is the pricing, especially for smaller businesses. “When you’ve got tens of thousands of employees, your health care premiums tend to be lower, because the risk [of a catastrophic illness] is spread out over many people,” he said. “But when you’ve got only 10 or 20 people, one employee with a major illness can affect your entire band and significantly drive up the premiums. Experienced consultants can help employers and employees wade through these and other issues.”
A recycling counselor
Businesses, of course, have a host of other concerns that can keep owners up at night. If the average person was asked to draw up a list, salaries and fringe benefits would be near the top, perhaps followed by material and other direct operating costs. But guess what? Waste disposal is another upper-rung item, at least in the Garden State.
“Some 32 years ago, New Jersey embarked on a sweeping experiment in being the first state in the U.S. to require recycling through the 1987 Mandatory Source Separation and Recycling Act,” said Valerie Montecalvo, president and CEO of the Bayshore Family of Cos., which Valerie and her husband, Frank, started in 1995. “The law required that the DEP develop an overall master plan for recycling, and the 21 counties were delegated with the responsibility to prepare county-specific plans and to designate materials for mandatory recycling. We started with three materials — bottles, cans and newspaper — but this was a floor, not a ceiling.”
Today, she added, county master recycling plans cover an average of 16 waste categories, “and include plastics, cardboard, all grades of paper, construction debris, white goods — like refrigerators, washers and dryers — and even car batteries and used motor oil. Through the years, the recycling industry in New Jersey has grown to employ some 27,000 people, which adds almost $6 billion annually to our state economy.”
Bayshore Recycling helps towns and businesses avoid fines and other penalties by serving as a processor of commingled recyclable material. Working out of a 58-acre eco-complex and energy campus in the Keasbey section of Woodbridge Township, Bayshore Recycling and its affiliated operations include nine distinct recycling operations that can accept more than 10,000 tons per day of approved material.
“In a nutshell, we take apart all the stuff you mix in the recycling bucket at the curb,” Montecalvo explained. “Through a fully automated system, we mechanically separate the commingled materials to send commodities to markets, to manufacture new products.”
Most people don’t realize that recycling “is a highly complex and competitive business where commodities are bought and sold each day as is done on the floor of the New York Stock Exchange,” she added. “Bayshore employs highly sophisticated equipment, such as vacuum pick-up ducts, screening decks, magnets, cyclone separators and optical scanners to segregate each commodity for shipment to markets.”
Her company currently accepts ‘Class A’ curbside recyclables —including aluminum, steel and tin cans, glass bottles and jars, newspaper, and corrugated cardboard — from 47 New Jersey municipalities with a combined population of about 1.2 million people, or about 13 percent of the state’s residents, “and from countless businesses,” Montecalvo said.
It’s a booming business, but she has some serious concerns. “We now stand at a crossroads in recycling as international markets have all but collapsed, most notably based on public policy decisions and regulatory restrictions imposed by China which have been widely reported on and characterized as the Green Fence and Green Sword initiatives,” Montecalvo said, referring to attempts by the nation — which has been a huge market for U.S.
ecyclables — to limit its imports of discarded material from the U.S. “The net result is that we have an oversupply of material and too little demand for recycled commodities. Bayshore and other processors are weathering this storm by adding equipment to further refine separation to provide markets with better and cleaner feedstock.”
Nimble companies will take a variety of approaches to provide their clients with top-notch goods and services and help them to cut costs. But regardless of the industry, there’s a common thread that runs through all the best performers: they monitor their business environment and embrace innovation.