Gov. Mikie Sherrill and 17 unions representing state workers have reached an agreement that waives a 2027 increase in the contribution rates employees pay toward their health insurance.
Prior to the announced freeze, the state workers were facing a 15.1% premium increase.
The agreement announced by the governor on Wednesday also includes a broader state-led effort to make the State Health Benefits Program covering 690,000 public workers more sustainable. By Oct. 1, the state will establish a working group to address the rising healthcare costs and the structural challenges facing the program.
The group will include representatives from the state and unions, as well as other stakeholders such as plan administrators, carriers, healthcare providers, independent experts, and others with relevant information and experience. The group will be examining contracts, operations, benefits, participation rules, premium-contribution structures, data transparency, and more.
“This agreement brings key stakeholders to the table to take on this challenge together, to address rising costs while preserving high-quality benefits and putting the program on a more sustainable path for the future,” Sherrill said. “This is about affordability for our public servants, but also for New Jersey taxpayers.”
New Jersey administers one of the nation’s largest and most complex public employee health-benefit systems, providing coverage to approximately 690,000 members across its state employee, local government and education plans.
The system’s unique structural challenges have made it harder for the programs to innovate, offer transparency and accountability, and respond with flexibility as costs increase, placing growing pressure on public employees, employers, and taxpayers without addressing the underlying cost of care and prescription drugs, the governor’s office said.
“This administration is committed to bringing a broad group of stakeholders to the table and working with our partners in the Legislature to develop a responsible path forward for the State Health Benefits Program,” said New Jersey Chief Operating Officer Kellie Doucette.
Dennis Trainor, CWA District 1 vice president, said state workers seek structural reforms to the state health benefits plan and a seat at the table when cost-drivers are examined.
“We've said it from Day One: rising health care costs can't be solved by asking workers to pay more year after year without addressing long-term systemic change,” Trainor said. “We appreciate Governor Sherrill's willingness to work with us, and we're ready to keep building on this agreement to make healthcare affordable and sustainable for all of our members.”
