Sweeney Proposes Switching Teachers to Cheaper Healthcare Plans

Senate President maintains there would be savings for workers and for government

Senate President Steve Sweeney on Friday proposed switching teachers from their current healthcare plans to lower-cost coverage now enjoyed by state government workers.

“It costs less, less out of pocket, so you’re going to save money. The worker saves money, the government saves money, everyone saves money, and you still have Fortune 500 healthcare coverage,” Sweeney told the annual conference of the New Jersey Principals and Supervisors Association (NJPSA) in Monroe Township.

About 30 percent of New Jersey school districts — with almost 62,000 teachers — get their coverage under the School Employees Health Benefits Plan. So do community colleges. Family coverage costs taxpayers and teachers $37,905 a pop, with teachers paying $8,718 in annual premiums. Compare that to the State Health Benefits Plan, which is $27,269 for family coverage, with teachers paying $5,438. Merging the plans could save about 25 percent — an estimated $300 million a year, Sweeney (D-Gloucester) said.

“And if we can save money, there’s more money for raises, there’s more money for technology, there’s more money to improve education,” he said.

Sweeney’s proposal, a major pillar of his Pathways to Progress plan to cut state spending, resonated with a roomful of educators who face rising costs and, in many cases, decreased state aid. Shifts in the school funding formula have forced 30 percent of New Jersey’s districts to confront deep cuts — like Hillsborough, which will lose more than $500,000 this year.

Promises not to increase costs for retired teachers

“I am at the point where I don’t know if we’re going to recover. My friends and family kind of see me as a Pollyanna. I’m always, always, unflaggingly optimistic about things — ‘We will figure it out, we will find a way.’ And I don’t think we will this time, and we can’t do it unless you help us,” said Hillsborough High School principal Karen Bingert.

“I understand the position you’re in. I think we have a responsibility to help you,” Sweeney.

Sweeney, who has had a bitter relationship with the NJEA, New Jersey’s teachers union, after it opposed his re-election, promised not to increase healthcare costs for retired teachers.

The proposal to merge the two healthcare plans would require legislative approval and the signature of a governor who is a staunch supporter of collective bargaining. New Jersey recently renegotiated healthcare coverage with its state workers union, saving an estimated $70 million.

“The state workers bargained for those benefits. Our members bargain for them at the local level and then the school district goes out and buys that level of benefit — whether it’s from the state plan or somewhere else. So that may be an obstacle to doing what they’re discussing, but let’s look at it. Let’s talk about it. Let’s figure out what the impact is, and maybe figure out if there’s a way of working that out,” said NJEA executive director Edward Richardson.

The Office of Legislative Services is crunching the numbers, and the new proposal will be rolled out sometime in April — just in time for state budget negotiations.