The Senate plans to fast track a bill backed by the state’s largest teacher’s union this week that would overhaul the health plans for hundreds of thousands of teachers and school employees—and according to proponents would save the state more than $1 billion annually for teachers and local districts.
“As the state rallies together to face the uncertainty of the global pandemic brought on by the coronavirus, we have to demonstrate to New Jersey that government will continue to function,” Senate President Stephen Sweeney, D-3rd District, said in a Tuesday statement.
Sweeney unveiled the 19-page bill – Senate Bill 2273 – on Monday, with a likely vote Thursday at a full floor Senate voting session at noon.
That comes amid the coronavirus outbreak and mass closures of businesses, schools, large gatherings and government offices.
“While we focus on the immediate threat to public health and economic stability, it’s important the public understands that their government is steadfastly working towards [sic] both their short and long-term welfare,” Sweeney added.
The often-rivaling New Jersey Education Association 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.
And they come 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.
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.