During the February 23 Assembly Budget Committee meeting, key members expressed strong interest in an NJEA proposal to require all public school employees to be enrolled in the New Jersey State Health Benefits Program.

Such a move would immediately impose sharp cost increases on school districts and property taxpayers. Although no legislation has been introduced, the requirement could be implemented simply as a footnote to the 2006-07 state budget.

NJSBA urges you to tell members of the Assembly Budget Committee —

• The proposal would affect premium costs in districts that now purchase coverage from private carriers.

• It would rescind all health-benefit cost savings negotiated between school boards and employees in those districts.

• The concept runs directly opposite to recommendations made late last year by the state’s Benefits Review Task Force.

Cost-containment not possible Currently, approximately 60% of the state’s school districts do not provide benefits through SHBP, opting instead to secure coverage through private carriers. For these districts, the advantage of private carriers may include not only lower premiums but also the ability to negotiate cost-containment provisions. These provisions—such as changes in deductible and co-pay levels, tiered coverage, employee contributions to individual employees’ premiums, and incentives to waive duplicate coverage—are not available to school districts under current SHBP rules.

Competition eliminated With the creation of a state-driven health insurance monopoly, competition to reduce costs would be eliminated—along with any impetus to reform the SHBP.

Contradicts blue ribbon panel The NJEA proposal runs directly opposite to recommendations made late last year by the state’s Benefits Review Task Force.  That panel examined the  pension system and SHBP. Its recommendations include—

• Giving school districts the ability to negotiate cost-control measures, such as changes in deductible and co-pay levels.

• Immediately applying to local school districts that obtain coverage through SHBP the same cost-saving measures now available to state government—such as negotiating premium-sharing arrangements and different benefit packages with different bargaining units at the same location.