Transfer from SEHBP to SHBP Will Preserve Superior Health Coverage
TRENTON – Legislation sponsored by Senate President Steve Sweeney that would produce substantial savings in health care costs for employees and retirees of county colleges in New Jersey while preserving superior coverage was approved by the Senate today. Transferring the college workers back into the State Health Benefits Program from the School Employee Health Benefits Program will also result in cost reductions for the colleges and the taxpayers.
The bill, S-2455, will produce the same savings for community colleges, their workers and retirees that state employees and state and local government realized when the SHBP’s joint labor-management committee worked cooperatively to find cost savings last year.
The legislation will save the community colleges an estimated $17.5 million a year and their employees another $4.5 million. This will produce an average savings of $700 for each worker, with savings reaching $2,000 for members in family plans.
“The State Health Benefits Plan has succeeded in holding down costs for state and local workers, and these benefits should be provided to county colleges as well. Health care is one of the most significant cost drivers and this will help contain those expenses while preserving the quality of the coverage,” said Senator Sweeney. “This legislation will produce real and lasting savings for the employees and the county colleges.”
The changes will preserve superior health insurance coverage, providing the same coverage offered by Rutgers and the other state colleges and universities.
“This legislation will save the state’s 19 community colleges and their employees $22 million and will assist our colleges to continue to provide high-quality, affordable education to hundreds of thousands of students each year,” said Dr. Steven Rose, president of Passaic County Community College and chair of the New Jersey Community College Presidents. “This will greatly benefit our colleges, our employees and most importantly our students.”
In 2017, the State Health Benefits Program Plan Design Committee proposed changes that would yield significant cost savings. The changes affected the prescription drug plan and reimbursement rates for some out-of-network costs. State and local employees adopted the changes and, as a result, SHBP members saw no increase to their premiums for active local workers while active state employees saw only a 3.4% increase. On the other hand, school employees in the SEHBP – which refused to accept the changes – experienced an 8.4% increase to their premiums.
This year, the projected cost savings to SHBP members will remain the same and local government employees will once again see no premium increase. The state is expected to see $1.6 billion in savings over the next three years.
However, SEHBP members will see their premiums increase by another 13%, meaning that premiums will have increased by more than 21% over a two-year span for public school teachers.
“For employees, the savings go into their pockets,” said Senator Sweeney. “For the colleges, they can go into important campus priorities at a time when most of the schools are facing funding challenges.”
The bill was approved by the Senate with a vote of 22-12.