TRENTON, September 18, 2018—The New Jersey School Boards Association has praised the agreement on public employees’ health benefits, announced yesterday, as a positive and meaningful step toward controlling one of the fastest-rising costs in local school districts.

Governor Murphy on September 17 announced the changes, which are predicted to save state and local governments, including school districts, approximately $496 million—$274 million for the current fiscal year, and $222 million in 2019-2020. The reforms apply to the School Employees Health Benefits Program (SEHBP) and another plan, the State Health Benefits Program, that primarily covers state, county and municipal employees. Representatives of the state’s public employee unions, including the NJEA, have agreed to the changes.

“NJSBA has been a leader in advocating strategies to control rising health benefit costs, which can have a negative impact on resources available for educational programming,” said Dr. Lawrence S. Feinsod, NJSBA executive director. “Yesterday’s agreement is a significant step toward this goal. We hope that the governor, the Legislature and the SEHBP Plan Design Committee will take further action to address this issue.”

Advocating Reform NJSBA has a long history of advocating for the types of reforms reflected in the agreement.

For example, in August 2017, General Counsel Cynthia Jahn, who represents the Association on the School Employees Health Benefits Commission, made a motion to formally request that the SEHBP’s Plan Design Committee consider reforms already adopted by the state and municipal employee plan, including Medicare Advantage, limiting reimbursement for out-of-network services and mandating generic prescription drugs. The motion was unanimously approved by the five other members in attendance.

Under the September 17 agreement, the largest savings—$450 million over the next two years—will come from the adoption of the Medicare Advantage program for retirees from the State Health Benefits Program and the School Employees Health Benefits Program. Two new plans will also be introduced for active members of the SEHBP and those who retire early from the system. These plans will increase the use of generic drugs; will focus on in-network, rather than out-of-network, care; and will eliminate co-payments from members. If 10 percent of active employees migrate to the new health benefit programs, local school boards can expect to save $23 million in 2019, according to the governor.

The changes will also result in lower premiums for the 2019 plan year; with rates decreasing by 1.1 percent over last year—a dramatic change from the 13 percent increase the SEHBP experienced last year.

Commission to Vote on Reforms The reforms were approved on Monday through a committee-level vote on the SEHBP Plan Design Committee. The SEHBP commission will meet tomorrow, September 19, and is expected to approve the 2019 premiums for the school employees’ program, which will reflect the plan design changes announced by the governor.

Financial Relief “While the bulk of the savings from these reforms will go to state coffers, additional savings can be realized at the local level that will enable school districts to invest in educational programming and services while providing financial relief to employees and taxpayers,” said Feinsod. “NJSBA looks forward to collaborating with all stakeholders to achieve these goals.”

Governor Murphy has convened the State Health Benefits Quality and Value Task Force, which will be meeting again this week, as well as hosting its first public listening session in Hamilton on Thursday, Sept. 20. Jonathan Pushman, NJSBA legislative advocate, is a member of the task force.

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The New Jersey School Boards Association is a federation of the state’s local boards of education and includes the majority of New Jersey’s charter schools as associate members. NJSBA provides training, advocacy and support to advance public education and promote the achievement of all students through effective governance.

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