A new health plan to be offered to school employees would save local taxpayers $670 million per year and reduce premium contributions by participating educators by another $403 million, Senate President Stephen Sweeney announced this morning.
At a State House press conference, Sweeney and New Jersey Education Association President Marie Blistan called the plan a win-win for taxpayers and teachers.
Because the agreement requires creation of a new plan, it must be done legislatively rather than through the collective bargaining agreement with the state, Sweeney said. The legislation is still being drafted.
The new health plan follows the direction of Sweeney’s Path to Progress reforms, which outlines a number of major initiatives to fundamentally change the structure of New Jersey’s finances to make the state more affordable. The section on healthcare calls for new plan designs and offerings that would make healthcare more affordable to both public employees, who have to contribute toward the cost, and the taxpayers who have to foot the rest of the bill.
“The agreement is the result of several months of intense negotiations and represents a culmination of several years of efforts to identify opportunities to address the quality of healthcare while dealing with the reality of its skyrocketing costs,” Sweeney said. “This agreement is a win-win for New Jersey taxpayers and educators that will deliver estimated savings totaling more than $1 billion annually.”
NJBIA, which has supported the Path to Progress structural reforms, cheered the initiative as necessary for the economy and affordability of the state, and, since the new plans should be ready by July, hoped its savings could show policymakers the way to a State Budget without the need for tax increases.
“NJBIA was pleased by today’s announcement of structural reforms to reduce the cost of our public employees’ health benefits, as we have long called for such reforms for the good of New Jersey’s economy and affordability.,” said NJBIA President and CEO Michele N. Siekerka in a written statement.
The agreement calls for creation of a New Jersey Educators Health Plan to replace most other plans currently being offered to teachers and provide comprehensive coverage for medical and pharmacy benefits with reasonable member copayments for physician care and 100 percent coverage for the use of in-network providers.
New members coming into service and those electing to switch to this new plan will see their payroll deductions tied to a new contribution schedule based on a percentage of salary as opposed to the currently required percentage of premium, Sweeney explained. Those electing to stay in the SEHBP’s more traditional plans will be required to pay more for their healthcare based on a percentage of their premium.
Blistan said in addition to the other benefits, the move to basing premium contributions on salary rather than health plan costs was particularly important to her members.
“It is no secret that our members have suffered a great deal under Chapter 78 (common way to describe the previous administration’s public employee benefit reforms), which imposed unsustainable and ever-growing health care costs on them,” Blistan said. “With this creative, collaborative approach, that burden is greatly reduced, and our members no longer need to fear that their take-home pay will decrease year after year as a result of those imposed contributions.”