Negotiating provisions to control health benefit costs has enabled some school districts to save more than $1 million a year, NJSBA representatives told a legislative panel exploring property tax reform during a hearing in Clifton on Tuesday.

Marie Hakim, president of the Passaic County School Boards Association, told the Joint Legislative Committee on Public Employee Benefits Reform that the ability to negotiate coverage with unions is not available to school boards that participate in the New Jersey State Health Benefits Program.

State regulations preclude SHBP-member districts from negotiating cost-containment provisions, such as changes in deductibles and co-payments, employee contributions to premium, and placing new employees in managed-care systems.

Almost 40 percent of New Jersey’s school districts use the state plan, with a large number concentrated in the Bergen and Passaic county area.  The costly New York-area insurance market and contractual difficulties leaves many northern districts with no option but the state plan.

Giving SHBP-member districts negotiations flexibility, therefore, is the best cost-control option, according to NJSBA.

Savings to Taxpayers Clifton has been reaping savings since it began opting for private health insurance in 1996, said Hakim, who has served on the city’s school board for more than 16 years.  The change initially saved her district $1.5 million.  In its latest round of negotiations, cost-containment provisions saved $1.2 million. 

The largest chunk of taxpayer money for schools, about 75 percent, is spent on salaries and skyrocketing employee health benefits.  Therefore, property tax reform discussions must include strategies that give school districts in the state health program the ability to negotiate healthcare costs, Hakim said.

Increase Competition Richard Snyder, a Ramsey school board member, said that giving such flexibility would make the state plan more competitive with private carriers, attracting school districts back into the program.

More than 450 school districts were enrolled in the state plan in the early 1990s. By the end of the decade, only 276 remained, he noted. Today, only 239 districts are enrolled in the state plan.

Snyder represents Bergen County as an alternate member of the NJSBA Board of Directors.

Testimony presented to the committee is posted online.