Come January, New Jersey teachers will participate in a reformed health benefits system that supporters said is designed to save taxpayers hundreds of millions of dollars, reduce the cost for educators and protect the quality of their health care.
Gov. Phil Murphy signed bipartisan legislation Wednesday that triggers the changes, which overhaul how teachers contribute to their health insurance premiums and reverses a highly controversial element of a previous benefits reform enacted in 2011 under former Gov. Chris Christie. The new measure had strong support from the New Jersey Education Association, the state’s largest teachers union, which has long advocated for the reforms.
The law — championed by Senate President Steve Sweeney (D-Gloucester) and Assembly Speaker Craig Coughlin (D-Middlesex) — seeks to reduce taxpayer costs for teacher benefits by what they said was at least $300 million. That’s accomplished by shuffling health-plan options, reducing the number of plans teachers can select and shifting from an employee-contributions system tied to premium price to one linked to earnings.
Murphy praised the work of Sweeney, Coughlin and NJEA president Marie Blistan and others and said that, by working together, they achieved “an outcome through which our taxpayers will save money, while the high-quality health care our educators deserve will be maintained. This was never, by the way, an either/or question. It had to be and/both. And today we proved it could be,” he said at a bill signing ceremony in a school gym in Union Township.
Unanimous in both houses
Both houses of the Legislature approved the measure (A-20/S-2273) unanimously on Monday, after lawmakers spent three months hashing out changes to a version the Senate passed in March. The amendments included a provision requiring actuaries to review the savings and, if they don’t reach at least $300 million, changes can be made to what the plans cover or how much workers contribute. Sweeney has suggested the reform could reduce public health-care costs by some $670 million, with additional savings for teachers individually.
“Public education employees are essential to New Jersey, and we value their contributions,” said a joint statement from Coughlin and other Democratic Assembly sponsors, who pushed for the amendment. “By providing new, more affordable health plan options and including a guaranteed floor of savings, this bill is a win-win.”
The NJEA, which represents some 200,000 educators, called the law a “milestone” that will enable teachers to keep more of their paycheck in their pocket. The agreement also reflects a new era for Sweeney and the NJEA, who have sparred bitterly over the years, with the union spending millions to try to unseat the powerful Democrat in 2017. Sweeney led efforts in the Legislature to achieve the Christie-era reform, known as Chapter 78 — which the NJEA has long opposed — and has pushed for other public benefit reforms.
“It’s hard to believe we’re here, but I’m proud to say we got it done,” Sweeney said at the signing ceremony. “This reform will produce lasting financial savings for local taxpayers and educators at the same time it maintains quality health care for public workers,” he also noted, in a statement.
Skin in the game?
While the NJEA has said Chapter 78 reforms were eating away at teacher salaries and driving some from the profession, the law sought to give teachers and other workers greater incentive to control their own health care costs. By contributing between 3% and 35% of their premium costs — based on salary — they were thought to have more “skin in the game” when it came to generating savings. But the change left public workers contributing among the highest share to their health insurance nationwide.
Under the law Murphy signed, teachers will have access to three plans, developed by a plan-design committee, in which costs are tied to salary. Options range from 1.7% for a single worker or 3.3% for the family of an employee earning $40,000 or less to 3.6% for an individual and 7.2% for a family with a salary of $100,000 or higher.
According to the bill, the base plan calls for zero deductible for in-network care and copays begin at $10 for primary care doctors and $15 for specialists; out-of-network options call for a deductible starting at $350 and higher out-of-pocket costs. Pharmacy benefits cover generics, with copays as low as $5, but would require the member to pay the difference if they opt for brand-name drugs.
Beginning in July 2021, a fourth plan — the Garden State Health Plan — will also become available. This option seeks to generate additional savings by only covering visits to New Jersey-based doctors and facilities, in exchange for lower premiums, a situation that might raise concerns for residents in some regions that border other states. School districts that do not participate in the state-run benefits program are required to offer comparable plans, unless they already have low-cost options available.
— John Reitmeyer contributed to this story