NJBIA recently submitted public feedback to help inform the work of the NJ State Health Benefits Quality and Value Task Force. NJBIA’s comments focused on opportunities that increase the value, quality and sustainability of the State Health Benefits Plan (SHBP) and the School Employees’ Health Benefits Plan (SEHBP).
Please read below for our comments.
If you would like to submit your own comments please visit https://nj.gov/governor/statehealthbenefitstaskforce/feedback.shtml
Question 1: Please describe any significant opportunities and challenges to increasing the value of the SHBP and/or the SEHBP.
It is no secret that the increasing costs of health benefits continue to be a significant cost driver for both State government, and local governments in New Jersey. New Jersey’s FY 2019 State Budget includes $3.4 billion for health benefits coverage for members of the State Health Benefits Plan (SHBP) and the School Employees Health Benefits Plan (SEHBP). This represents about 9.1 percent of the overall State Budget. Moving forward, it is important to ensure that the participants in both the SHBP and SEHBP receive quality health benefits, while addressing these rising costs. As such, we commend Governor Murphy for convening the State Health Benefits Quality and Value Task Force.
Significant opportunity exists for our government leaders to address the urgent need to remedy New Jersey’s healthcare costs through structural reform, costs that oftentimes crowd out spending in other vital areas of the state budget. True planning will help avoid structural deficits and set out a long-term vision for the state, for the good of New Jersey’s taxpayers and job creators. Addressing structural health benefit costs will allow New Jersey to increase its competitiveness and affordability within the region, without increasing costs to the business community as we have seen in the past.
Question 2: Are there specific recommendations you believe the Task Force should consider that would improve quality and sustainability of the SHBP and SEHBP?
While there are a number recommendations that would address rising costs while still ensuring quality health benefits, shifting health care coverage from Platinum-level benefits to Gold-level benefits for those participants of the SHBP and SEHBP is perhaps the most important. These benefits would be aligned to the best plans found in the private sector and would result in significant cost savings for both the State, as well as state employees.
Additional recommendations include requiring all new state and local government retirees to pay the same percent of premium costs they paid when working, merging the SEHBP into the SHBP, capping accrued terminal leave payouts for state and local retirees, and requiring an ongoing third-party audit of health care claims. Also, focusing on the root causes of excessive cost of care and re-examining the role of early retirement in the public sector are other options that would help provide sustainable and affordable health benefits.
All told, past reports have recommended holding pension and health care benefits costs to roughly 15% of the state budget, a level that is seen as sustainable. Without changes, combined pension and health benefits costs could rise to $4.1 billion dollars, and consume over 25 percent of the State budget by the year 2022.