A bill sponsored by the senate president and backed by the state’s largest teachers union to overhaul health plans for its members was approved in the Senate, as the measure gets fast-tracked through the state Legislature.
Proponents of proposed Senate Bill 2273, such as the New Jersey Education Association and Senate President Stephen Sweeney, D-3rd District, argue it could save more than $1 billion a year for teachers, as well as for state and local governments.
The measure passed Thursday by a 34-0 vote at a Senate voting session held in the much larger Assembly chamber, so that lawmakers and their staff could stay the recommended 6 feet apart to lower risk of the coronavirus’ spread.
“While we focus on the immediate threat to public health and economic stability brought on by the global pandemic, it’s important that government continues to work to find cost savings for taxpayers and public workers,”the Senate President said in a Tuesday statement.
The often-rivaling NJEA and Sweeney unveiled the deal on March 9, which calls for the creation of two lower-cost health plans for alternatives for teachers: the New Jersey Educators Health Plan and the Garden State Health Plan.
Those proposals would save $670 million a year for the school districts, $404 million for teachers and $30 million for the state.
“The difference we have this time around is that the unions are going to sell this to their members and that’s a big difference,” Sweneey told reporters via a telephone call following the Senate session.
Lawmakers in the state Assembly would have to approve the bill before it could head to Gov. Phil Murphy’s desk, but a voting does not seem apparent for the near future.
The agreement between Sweeney and the NJEA comes as state officials and lawmakers eye how to cut down on the ballooning costs of public worker retirement and health care, which together are unfunded by at least $100 billion.
The new plans would essentially offer “Chapter 78 relief,” a proposal long-backed by the NJEA since the creation of the Christie-era policy in 2011, requiring members to pay anywhere between 3 percent to 35 percent of their health insurance premiums, depending on their salary and plan.
“This is not what I’m pushing as a gold plan. It’s still a platinum plan, it’s just a reduced-cost platinum plan,” Sweneey added on Thursday.
Starting July 1, all new NJEA employees would be required to enroll in the NJEHP, where contributions are tied to annual salary.
The NJEHP would replace and eventually phase out the current plans in the School Employee Health Benefits Program: The NJ Direct 10 and NJ Direct 15. Enrollees in those plans would be encouraged to switch to the NJEHP because of the lower costs, under the proposal. Retirees would be enrolled in the NJEHP.
Existing employees can stay on those plans, but they would pay the higher premiums, and new employees would not have the option for Direct 10 or Direct 15, which requires $10 and $15 copay respectively.
Meanwhile, premiums at the GSHP would have half that of the educators’ plan, but they would be limited to health care providers in New Jersey.
Under the NJEHP, a teacher earning $70,000 a year could save between $2,000 and $4,500 annually, depending on whether they are in a single or family plan. A teacher earning $35,000 annually would pay $577.50 a year, or $1,155 for the family enrollment.
The plans would all be reassessed in 2027, according to the bill.