Teacher Health Plan Change in the Works

Teacher Health Plan Change in the Works

A new state-run health benefits program exclusively for public school employees will go into effect by 2008-2009 under legislation approved by Assembly and Senate committees on Monday. The bills, A-5005 (Roberts) and S-3004 (Scutari), are expected to see final action in both houses by the end of the month.

Boards Represented NJSBA’s initial review of the legislation indicates:

A representative of the New Jersey School Boards Association would serve on the nine-member commission overseeing the new plan, called the School Employees' Health Benefits Program. It would mark the first time that a representative of local school boards would have a voice in the governance of a public employee health program, achieving a long-term NJSBA goal.
School districts in the state’s existing plan, the State Health Benefits Program (SHBP), would automatically move into the new system in 2008-2009. Approximately 192, or 33 percent, of the state’s school districts participate in the SHBP.
School districts that secure health coverage through private carriers will not be forced to join the new state program.
Recent advances in cost containment of benefits will be available to school boards in the new School Employees Health Benefits Program. These provisions allow waiver incentives, employee contribution to premium, and different levels of coverage for various groups of employees based on date of hire, salary and other factors.
The school employees’ plan will reflect current benefit levels under SHBP. However, the new program will transition from a traditional health plan into a large-network preferred provider organization.

State Labor Negotiations The new school employee health plan resulted from an agreement between the state teachers union and Governor Corzine. The existing SHBP, which was established for state workers, can change as a result of labor negotiations between state employee unions and the governor.

The teachers union wanted to carve out a new health program for active and retired school employees that would not be vulnerable to these changes.

Pension Changes In addition to creating the new health insurance program for school employees, A-5005 and S-3004 would increase annual employee contributions to the state retirement systems—including the Teachers Pension and Annuity Fund—from 5 percent to 5.5 percent. Other pension system changes are also reflected in the bill.

Further Analysis NJSBA will post an in-depth analysis of the legislation on www.njsba.org. The proposal is expected to be enacted at the same time as the 2007-2008 state budget.