New Jersey school employees will enjoy a decrease in their health insurance premiums next year and a first-ever, one-month holiday from paying their health premiums, New Jersey’s Department of Treasury announced.
“The reforms and efficiencies the Murphy Administration has enacted over the last several years in partnership with the Legislature and organized labor have paid sizable dividends that will be reaped by both school districts and plan members this coming year,” said State Treasurer Elizabeth Maher Muoio said in an Aug. 16 press statement. “As a result, our reserves have never been stronger, justifying a well-deserved contribution ‘holiday’ for participating SEHBP school districts and their members.”
“Not only will this provide financial respite for SEHBP participants, it will also free up money to help meet other important priorities.”
SEHBP refers to the School Employees’ Health Benefits Program. Kevin Kelleher, New Jersey Education Association deputy executive director and SEHBP commissioner, echoed Muoio’s words. “We’ve never lowered benefits, instead we’ve really buckled down and demanded more from the way benefits are administered, and ultimately delivered true savings,” Kelleher said.
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The premium rate drops for New Jersey educators and other school employees stand in “stark contrast” to a 3.8 % median increase projected for private insurers in the Affordable Care Act marketplace in 2022, according to the Kaiser Family Foundation, according to state treasury officials. The 2022 premium for the New Jersey Educators Health Plan (NJEHP) is projected to be 11% lower than the 2022 premium for the NJDIRECT 10 health plan. The premiums for legacy plans NJDIRECT 10 and NJDIRECT 15 are also projected to decrease by 1.6% over last year.
Rate Drop Bucks Broader Health Trend
“It was not too long ago that the State was witnessing double digit increases in health insurance premiums. Nationally, most private insurance premiums continue to rise year over year. We have successfully bucked the trend by maintaining and even decreasing premium rates, thanks to the sustainable reforms we have put in place in recent years,” Dini Ajmani, Assistant State Treasurer, said.
These reforms included, according to Treasury:
- Implementing “a more stringent claims review process”;
- Increasing oversight; and
- Implementing payment integrity initiatives and long-sought, out-of-network changes that reduced payments to physical therapists, chiropractors, and acupuncturists.
Additionally, Treasury cited lower use of health services due to the pandemic as a factor that contributed to stronger reserves than usual.
Treasury described the overall trend of lower health care premiums for SEHBP employers as “sustainable.”
February 2022 Holiday
The premium contribution holiday is slated for February 2022, and Treasury said it will provide an estimated $100 million in savings to school employers and employees.
School districts participating in the plan as of July 1, 2021, will get the one-month break from paying premiums.
Treasury said reserves are projected to top $652 million for Plan Year 2022, representing more than half of the yearly cost of health benefits for all participating SEHBP school districts. The minimum amount recommended to be held in reserve by actuaries is two months.
Treasury: Revenue Collections ‘on Target’
Treasury said in a separate press release that July 2021 revenue collections were ‘on target’ despite a 51.5 % drop in collections for the major taxes, which totaled $2.491 billion—$2.645 billion below July 2020.
“This decline was anticipated because last July was atypical, witnessing heightened collections due to the fact that the state and federal government extended the tax filing deadline for individual and corporate taxpayers from April 15 to July 15 in light of the COVID-19 pandemic,” Treasury said in an Aug. 13 press release.
July 2021 Gross Income Tax and Corporate Business Tax collections were down—by 74.1% and 69.5% respectively. Meantime, July 2021 Sales and Use Tax collections were up by 23.9 percent from the previous July for a monthly total of $1.218 billion. Treasury said the Sales and Use Tax provides the largest revenue source for the state’s General Fund.
Consumer Spending Rebound
“While last July’s collections were low due to pandemic-related economic restrictions, the subsequent consumer spending rebound has been substantial. July 2021 receipts are also well above pre-pandemic levels in July 2019 – 19.4 percent higher over the two-year period,” Treasury said.
Total revenues of $40.826 billion for the 13 months ending in July increased by $5.907 billion, or 16.9 percent over the same 13-month period last year, in line with current expectations, Treasury said.