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Sweeney: Merger of State Health Benefits Plan and SEHBP Would Save Hundreds of Millions for School Districts and Teachers

Senate President reiterates pledge that Path to Progress legislative package will not require retirees to pay more for healthcare premiums

Monroe Township – Declaring that teachers and school districts are paying too much for their healthcare coverage, Senate President Steve Sweeney today called for the merger of the high-cost School Employees Health Benefits Plan into the lower-cost State Health Benefits Plan to take advantage of the cost savings negotiated by the Governor and the state’s largest public workers union.

Speaking at a meeting of the New Jersey Principals and Supervisors Association, Senator Sweeney said legislation merging the two healthcare plans would be a cornerstone of the Path to Progress legislative package that will be introduced to implement recommendations of the bipartisan Economic and Fiscal Policy Workgroup.

“There’s no excuse for teachers and taxpayers to be paying $37,905 for a family plan under the School Employees Health Benefits Plan when state workers and taxpayers are  saving money and getting superb coverage for just $27,269 under the new State Health Benefits Plan,” said Senator Sweeney (D-Gloucester/Salem/Cumberland).

“While the state employee unions worked hard to find savings, the SEHBP has gotten so expensive that it has lost one-third of its members since 2014, Newark, Jersey City and Paterson all dropped out in the last year or so. It makes no sense for a teacher making $75,000 to pay up to $8,718 for the premium on an SEHBP family plan when a state worker making the same amount only has to pay $5,438 in the SHBP. Teachers and taxpayers are both paying too much.”

Reiterating the pledge he made at a Rowan College at Burlington County Town Hall meeting two weeks ago, Senator Sweeney said the Path to Progress package will not include legislation requiring retirees to pay more for their healthcare coverage.

“While New Jersey is unique in charging retirees less than current employees for their healthcare coverage, we recognize that living costs are high, and we will not be asking retirees to pay more,” he said. “In fact, we want everyone to pay less.”

Senator Sweeney said he has asked the non-partisan Office of Legislative Services for a fiscal estimate of the savings that would be achieved by merging the SEHBP into the SHBP.

“We know the savings will be substantial because of the 25 percent cost differential between the two plans,” Senator Sweeney said. “That’s why the county colleges are so desperate to get out of the SEHBP, and why they and their employees were so disappointed when the Governor vetoed our legislation giving them the opportunity to go into the SHBP.”

Senator Sweeney noted that the State Health Benefits Plan originally covered both state and local government workers and teachers, and that the SEHBP was created by legislation under former Governor Jon Corzine.

“What the Legislature creates, the Legislature has the power to change when conditions change,” Senator Sweeney said. “And clearly, our school districts, county colleges and teachers and professors need the cost savings this legislation will bring.”

While only 30 percent of school districts are still in the SEHBP, Senator Sweeney said his legislation would provide savings for other districts by establishing the SHBP Direct PPO rates, which range from $9,484 for individual coverage to $27,269 for a family plan, as a new cost benchmark for school districts that have left the SEHBP to shoot for.

“Most of the state’s largest school districts are no longer in the SEHBP, but they are still paying way over $30,000 – often $35,000 or more –  for family coverage,” Senator Sweeney said. “Healthcare contracts typically are renewed annually. I would urge school districts that are facing layoffs – whether they are in the SEHBP or not – to endorse this legislation.

“And once this bill is passed, I would urge them to sit down with their unions to negotiate side agreements that would allow them to sign up for the lower-cost SHBP plan next January. They owe it to their teachers, who have been overpaying for healthcare coverage for too long. They owe it to their taxpayers, and most of all, they owe it to their schoolchildren.”