On Monday, Sept.  19, the New Jersey School Boards Association expressed its disappointment concerning the approval of double-digit premium increases in the School Employees’ Health Benefits Program for the plan year beginning Jan. 1, 2023.

For active employees in the SEHBP, there will be a 15.6% increase for medical and a 10.8% increase for the prescription drug premium rates, for a total increase of 15.1%.  A full report on the 2023 rate renewal is available here. These double-digit increases are far higher than they have been in recent history.

NJSBA strongly opposes the increases. Carl Tanksley, the Association’s acting general counsel and representative on the School Employees’ Health Benefits Commission, cast the lone dissenting vote when the matter came before the body for approval.

Most of the increases in the SEHBP premiums will be paid for by local boards of education. This has always been the case historically. However, since the enactment of the 2020 health benefits reform law commonly referred to as “Chapter 44,” many employees now contribute a percentage of their salary, rather than a percentage of premium toward their coverage. Therefore, many boards of education will be forced to absorb even more of the costs associated with the increases than they would have before the passage of that law. The hikes also come after district budgets have been finalized, potentially forcing boards of education to cut programs for children as they search for ways to pay the additional costs.

In July, NJSBA urged members to inform the governor and their legislators about the potential impact on schools and ask them to search for strategies to limit increases for the 2023 plan year. The Association also provided a sample resolution opposing the proposed premium increases; several boards did pass such a resolution.

“The move could have a very negative impact on district budgets — and ultimately undermines student achievement,” said Irene LeFebvre, NJSBA president.

“School district budgets were finalized last spring,” noted Dr. Timothy Purnell, NJSBA executive director. “Such increases could force boards of education to reduce or remove instructional programs, services and staff that help our students.  We urge the governor and Legislature to provide relief to local boards that have been affected by this.”

The NJSBA has also urged the state to direct federal American Rescue Plan dollars to mitigate the impact of these increases on district budgets. Legislation, S-2995, to do just that has been introduced in the state Senate but has not yet been scheduled for a hearing. Several other bills have also been introduced recently in response to the SEHBP premium hikes, as well as those that were approved by the State Health Benefits Program last week.

The State Health Benefits Commission set its 2023 rates last week. Participating local governing bodies will see premiums for active employees rise by over 21%. Premiums for the state portion of the plan will increase by a slightly lower amount, 19.2%, although the Murphy administration negotiated a deal with state worker unions to absorb most of those costs rather than pass them along to employees.

Below are some other measures introduced in response to the exorbitant insurance hikes in the SEHBP and SHBP:

  • S-2994: Concerns annual reporting requirements of SHBP and SEHBP commissions.
  • S-3033/A-4552: Appoints members to State Health Benefits Commission and School Employees’ Health Benefits Commission. This bill would guarantee that management has increased representation on both commissions.
  • SCR-120: Constitutes a special committee of Senate and General Assembly titled “New Jersey Public Employee Health Care Program Costs Investigation Committee.”

To view the full text of any of the bills summarized above, please visit the New Jersey Legislature’s website.