According to a financial report just issued by AON, the state’s actuary firm, New Jersey has saved its employees over $462.7 million dollars in healthcare benefit costs within just 3-years of Governor Murphy’ signing into law “Chapter 44” which authorized the State to restructure and change its provision within the state’s three healthcare benefit programs offered to state employees.
The new legislation was signed into law on July 1st, 2020, its purpose was to reduce healthcare premiums for certain school employees who had chosen to modify their existing healthcare coverage under a new healthcare package called the State Educators Health Benefit Plan (SEHBP). The new law also proposed a $300 million dollar net savings, as an indicator for its success.
New Law Provides Huge Savings for State Employees
As part of the legal requirements mandated under Chapter 44, AON was tasked with auditing the new healthcare plan along with any net savings derived from the change. After completing its analysis AON concluded that SEHBP had far exceeded the $300 million threshold levied by the administration.
“This is welcome news for hardworking school employees, their employers, and New Jersey taxpayers as a whole,” said Governor Phil Murphy. “This is a testament to the power of collaboration and proof positive that there are savings to be had through creative solutions that prioritize both quality health benefits and greater affordability.”
State Treasurer Elizabeth Maher Muoio also echoed the Governor’s optimism. “This truly represents a win for both employees and employers in our state. This report shows that Chapter 44 is working as intended in delivering savings, while still ensuring plan members have access to high-quality health benefits.”
Garden State Offers 3 Healthcare Plans
Chapter 44 directly affects both current state employees along with retirees who haven’t yet become eligible for Medicare, along with changes to plan designs offered through SEHBP.
Also, according to the law, two additional healthcare benefit plans must be offered by all school districts, along with additional changes and options for individuals choosing to enroll within either of the two current healthcare plans being offered by the State. Individuals purchasing a plan can also separately purchase pharmacy and dental benefits outside of the program without limitation or restriction.
The three healthcare plans being offered by the State are the New Jersey Educators Health Plan as developed by the School Employees’ Health Benefits Plan Design Committee, the SEHBP NJ Direct 10 plan as adopted and implemented by the School Employees’ Health Benefits Commission for the plan year that began January 1, 2020; and the SEHBP NJ Direct 15 plan as adopted and implemented by the School Employees’ Health Benefits Commission for the plan year that began January 1, 2020.
Additional Outside Benefits without Restrictions
Had the three-year net savings estimate fallen below the $300 million threshold called for under the law, further plan design changes would have been required.
“We are proud but not surprised to see that Ch. 44 is working exactly as intended,” said NJEA President Sean M. Spiller. “When NJEA first started pushing for this law more than four years ago, we promised a win-win-win solution where school employees, school districts and the state would all save money. This report proves that we have more than delivered on that promise and it shows that good things happen when we are brought in as partners to address the challenges facing our schools and our profession. We look forward to working even more with the Legislature and Gov. Murphy on other innovative ways to support school employees and to keep our schools the best in the nation.”