STATE

State approves health benefits increase for NJ public workers, could spike as high as 20%

Trenton Bureau

Public employees throughout the state can expect an increase on their health insurance plans.

The rate spike was approved Wednesday morning by the State Health Benefits Commission after two months of outcry — including a large rally at the Statehouse on Tuesday — from labor leaders about the impact.

The vote, which included rate increases for public employees of about 20% passed with three votes in favor. Commissioner Jennifer Higgins opposed, and Commissioner Dudley Burdge abstained, explaining that he would have voted in favor of the state rates but against the local government rates.

“I don’t think there was serious consideration given to ways to alleviate those costs and I’m very concerned that we’re going to have many locals leave, that we’re going to have many members of the plan who are going to have to pay a lot more as well as the impact on municipality and county budgets and taxpayers,” he said.

Burdge's distinction is because of the contracts that govern the employees at different levels of public employment. State workers that are part of certain unions — including AFSCME Council 63, CWA, IFPTE Local 195, the New Jersey Council of State College Locals, AFT and IBEW Local 33 — will only see an increase of about 3%, with the rest of the overall increase covered "by other means," Burdge said. Employees on the local and county level will see a spike of about 20% each.

New Jersey public employees protesting to prevent a raise in the costs of their healthcare benefits that is to be voted on tomorrow. The large protest took place outside the statehouse annex in Trenton, NJ on September 13, 2022.

Burdge and Higgins are the AFL-CIO representatives, for local and state employees respectively, on the committee.

Before the vote, a representative from Aon, a health care consulting firm, presented the specific changes that were made since the plan had initially been presented earlier this summer. The premium increase will still be more than 20% on medical insurance.

Higgins also asked about the use of American Rescue Plan funds but was told that isn’t a question that can be answered “in this forum at all” and that the question “isn’t for this body.”

The State Health Benefits Commission is charged under statute with setting the premiums for the plans within the program each year. The increase is based on the recommendation of Aon actuarial consultant, which analyzed previous coverage levels, trends in service usage and inflation to make recommendations to the commission.

There are about 816,000 public employees covered by the State Health Benefit Plan and the State Education Health Benefit Plan, according to the Treasury Department. This includes all manner of employees, from firefighters to teachers to local and state workers.

The proposal could affect all state employees, as well as 763 county and municipal agencies employing a wide variety of workers from every county, according to information provided by the New Jersey Association of Counties.

In addition to driving up the cost of health care for these workers, labor officials warn, the trickle-down effect of the exponential increase could affect local property taxes, because municipalities and counties would be on the hook to cover a portion of the increased rate.

The Senate majority leader, Teresa Ruiz, also warned in a statement on Wednesday that "New Jersey's increase, absent any solution, could ultimately lead to higher property taxes."

Her Republican counterpart, minority leader Steve Oroho, echoed that sentiment, noting that the “higher premiums will also have a huge impact on school districts and local governments that pay a large portion of the total premiums for their employees.”

“Any higher costs they pay will translate directly into higher property taxes for our families,” he said. “We must investigate the failures that led to these catastrophic premium increases to develop an effective plan going forward.”

Labor leaders had called for the vote to be postponed so that Horizon, the benefits provider, could be further questioned on cost projections. But Treasurer Elizabeth Maher Muoio, who is designated as the chairperson of the State Health Benefits Commission, said the vote can’t be delayed because the open enrollment for members starts Oct. 1.

The Record Guild, made up of editorial staff of the USA TODAY Network New Jersey, belongs to the NewsGuild of New York, which is a chapter of the CWA, one of the unions impacted by the increase. The increase does not affect Guild members.