Some NJ school workers will pay more for health benefits next year as state approves rate hike

Days after state and local workers were hit by hikes, a state board on Monday approved a double-digit increase in health insurance premiums for some New Jersey school teachers and employees the next year.

The State Schools Employees Health Benefits Commission voted 5 to 1 to increase rates by approximately 15% for calendar year 2023 for those enrolled in the state’s Schools Employee Health Benefits program. school workers.

The increases mean that workers will pay more out of pocket and districts will bear greater costs, which in turn could affect taxpayers either through higher property taxes or program and staff cuts. New Jerseyans already pay the highest property taxes in the nation, on average, and most of their bill goes to schools.

How much school districts pay to cover insurance costs versus how much employees pay varies by district, depending on what unions have negotiated. Districts typically cover the majority of costs, with employees paying the rest.

Monday’s vote comes five days after a separate state health board voted to approve controversial double-digit rate hikes on health insurance plans that cover more than 800,000 state and local government workers. A last-minute deal between Governor Phil Murphy’s administration and unions has limited the burden on state employees. Plans for municipal and departmental employees will increase by almost 23%.

State officials said the increases were the result of many factors, including rising health care costs, inflation and the lingering effects of the coronavirus pandemic.

The hike approved Monday only affects school districts and county colleges that use the state health plan. Other districts obtain their insurance through private plans.

About half of New Jersey’s 600 districts participate in the state’s plan. As of July, more than 150,000 people were covered by the program, according to the state treasurer’s office.

The New Jersey School Boards Association opposed the decision, saying the increases are “much higher” than in recent times.

The group also noted that the increases come after many district budgets have already been finalized, which could force school boards to cut programs or lay off staff.

“This decision could have a very negative impact on district budgets — and ultimately undermine student success,” NJSBA President Irene LeFebvre said in a statement.

Dr Timothy Purnell, the group’s executive director, called on Murphy and the state legislature to “provide relief to local councils who have been affected by this”.

Carl Tanksley, the NJSBA’s acting general counsel and representative on the Health Benefits Commission, cast the only no vote on Monday.

The New Jersey Education Association, the state’s largest teachers’ union, noted that the increases come after two years of declining premium rates for health plans.

“Nevertheless, an increase of this size is still cause for concern,” said NJEA spokesman Steven Baker. “That’s why we demanded detailed information about the increase and didn’t vote on the rates until we had that information.”

Baker urged NJEA members to enroll instead in the two-year-old New Jersey Educators’ Health Plan, which he said “provides high-quality coverage at a much more affordable cost for our members”.

Danielle Currie, spokeswoman for the state treasurer’s office, said “we share the concerns about the rate increase and the effect it will have on public employees and employers.”

But Currie noted that the rate-setting process is set by state law and that rates are “largely formula-based, determined by actual usage over the past year and projected costs, and finally decided by the health benefits commissions”.

The panels that approve insurance rates for New Jersey public employees are made up of both government officials and union representatives.

NJ Advance Media Writer Derek Room contributed to this report.

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Brent Johnson can be attached to [email protected]. Follow him on @johnsb01.

Tina Kelley can be attached to [email protected].

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