One of New Jersey’s top Democratic elected officials is pushing for a proposal that would merge school employees’ health plans with the less costly state worker health plan, as costs for health care for public workers rise year over year.
Senate President Stephen Sweeney, D-3rd District, said the proposal to merge the plans – called the School Employee Health Benefits Plan and the State Health Benefits Plan – would save the state roughly $300 million a year.
The legislation, according to a Senate aide, is being drafted and will likely be released in April as part of a package of recommendations from a workgroup convened by Sweeney which released the “Path to Progress” report in August, outlining how to lower the state’s pension and health care obligations.
Currently 61,000 school employees and 107,000 retirees are enrolled in the School Employees Health Benefits Program, which combined with their beneficiaries, totals about 270,000 enrollees, the aide said.
The proposed SEHBP-State Health Benefits Program plan would save teachers roughly $60 million and another $240 million for the school districts, the aide said.
Many of those districts lost school funding because of changes to the school funding formula approved last year as part of the 2019 budget, and the savings could more than make up for that lost money.
“There’s no excuse for teachers and taxpayers to be paying $37,905 for a family plan under the SEHBP when state workers and taxpayers are saving money and getting superb coverage for just $27,2690 under the new SHBP,” Sweeney said in his prepared remarks Friday at the Jersey Principals and Supervisors Association conference Friday morning in Monroe.
“It’s everyone’s benefit,” Sweeney added. “We’re dealing with some things that have to be addressed. We can’t ignore them anymore. It’s to the point where if we don’t address these problems, it’s going to become unfixable.”
Sweeney said he would back off of his proposal to have school health plan retirees pay for their health care as a percentage of their salaries.
The “Path to Progress” features dozens of proposals on how to reduce the state’s public worker pension and health care obligations, and reduce property taxes.
Gov. Phil Murphy has often remained frosty on many of the report’s proposals, especially the pension recommendations, and also called for collective bargaining as a means of driving down health care costs.
His 2020 budget calls for pumping $3.2 billion into the state’s pension obligation – still just 70 percent of what the state is recommended to make into its yearly pension payments. New Jersey would not reach 100 percent, roughly $4 billion, until the 2023 fiscal year, which starts in July 2020 — under his plan.
Murphy’s approach on reducing health care savings has been to negotiate contracts with many of the public worker unions. That includes $217 million of savings through negotiations with the public worker unions.
The governor’s budget calls for just over $1 billion in savings through cost-reductions, which Sweeney said is not enough and pales in comparison to the additional savings the administration and Legislature could find.