School districts that participate in the School Employees Health Benefits Program (SEHBP) will find the cost to the board will drop on Jan. 1, 2020.

Last week, the premium rates for the 2020 plan year for both the School Employees Health Benefits Plan (SEHBP) and the State Health Benefits Plan (SHBP) were approved by the joint management and labor commissions that administer the programs.  Overall rates for both plans will decline for the year.

The SEHBP rates for medical and prescription coverage will decline by 4.5% for active employees, and 4.8% for early retirees; rates will increase for retirees on Medicare by 8.4%.  The combined rate decrease for the plans is 2.3%.

About 30% of school district employees are enrolled in the School Employees’ Health Benefits Program. Cynthia Jahn, NJSBA general counsel, represents the interests of the Association and its member school boards on the School Employees Health Benefits Commission.

For local government employers, the SHBP rates will decrease by 4.3% for active employees, and stay flat for early retirees and retirees on Medicare. (State government workers are also covered under the SHBP.) The combined rate decrease for the plans is 3.8%.

A statement from the New Jersey Department of Treasury, which announced the rate decrease, credited cost-saving measures for the decline in rates, including increased oversight of health benefit and prescription drug vendors, a decrease in the use of out-of-network labs, optimization of prescription drug benefits, and better disease management.

In September 2018, an agreement was reached between employee unions and the state to make changes in employee health benefits plans for both active and retiree members that would result in cost savings for the plans.

Additional details on the SEHBP and SHBP rate renewals are available here.