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

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

The state School Employee Health Benefits Commission voted 5-1 to increase rates by about 15 percent for calendar year 2023 for those enrolled in the state’s School Employee Health Benefits Program.

The increases mean workers will pay more out of pocket and districts will shoulder higher costs, which in turn could affect taxpayers through higher property taxes or cuts to programs and staff. New Jersey residents already pay the highest average property taxes in the nation, and the largest portion of their bill goes to schools.

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

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

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

The increase approved Monday affects only school districts and community colleges that use the state’s health plan. Other areas get their insurance through private plans.

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

The New Jersey School Boards Association opposed the decision, saying the increases were “far higher” than recent increases.

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.

“The move could have a very negative impact on district budgets — and ultimately undermine student achievement,” NJSBA President Irene Lefebvre said in a statement.

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

Carl Tanksley, the NJSBA’s acting general counsel and its representative on the health benefits committee, cast the lone dissenting vote Monday.

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

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

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

Daniel Curry, a spokesman 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 Curry noted that the rate-setting process is set by state law, and the rates are “largely formulated, driven by actual use in the past year and projected costs, and ultimately decided by the health benefit commissions.”

The commissions that approve public employee insurance rates in New Jersey are made up of both state employees and union representatives.

NJ Advance Media staff writer Derek Hall contributed to this report.

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Brent Johnson can be reached at [email protected]. Follow him on @johnsb01.

Tina Kelly can be reached at [email protected].

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