NJ panel deadlocks on vote to raise health premiums for teachers

NJ towns, school districts owe millions to public worker health plans

Steve Beatty, president of statewide teachers union the New Jersey Education Association, told the panel that school workers can’t “just blindly accept” the proposed rate increases.

“We’re unions. We negotiate contracts, and we know just simply agreeing to what we know is a wrong thing and hoping they’ll change it is a fool’s errand,” Beatty said.

The panel’s deadlock is unusual and would likely have been avoided but for a vacancy on the nine-member commission. Administration officials by law hold a majority of seats on the bodies that set rates for public worker health plans, but one administration seat on the commission has been vacant since at least 2024.

The latest rate renewal snag comes less than a month after the panel chose to delay a vote on active school workers’ health care premiums to allow time for the Treasury to review the proposed rates, but rate recommendations were unchanged.

Though officials on a separate panel responsible for plan design on Monday received proposals to reduce costs, a 2020 law that was meant to encourage members to move to less expensive plans bars such changes until 2028.

The commission on Wednesday voted to reconvene for another vote on rate increases in two weeks, though it is unclear what, if anything, will have changed by then. Commissioner Sergio Arvizu, the interim chair, said the body needed to reconvene soon to avoid disruptions for members but warned the proposed rate increases were unlikely to shrink in the intervening days.

“There are no solutions that we can implement before 2027,” he said.

Theresa Williams, chief of health benefit operations for the state, warned logistical challenges meant delaying the rate renewal could force some members to choose their health plans without knowing what premiums they’d pay in 2027, prompting appeals the panel would be forced to deny. Denise Graff Policastro, a teachers union official who was previously a member of the commission, said she did not recall such appeals in past years.

New Jersey’s state-run health plans for school and local government workers are in distress. They are riven by years in a vicious cycle where rising rates push local units with healthier workforces to cheaper options in the private market, raising rates for those that remain and prompting more to depart in search of less expensive health care.

Union officials, who have chaffed at the rate increases and state officials’ efforts to curtail them by raising the share of healthcare visit costs that members are responsible for, urged the panel to do more.

“If we pass this, we’re going to be right here in a few months dealing with another crisis, and I just can’t in good conscience as a commissioner be in support of that,” said Daniel Holub, one of the panel’s New Jersey Education Association representatives.

Though the panel faces limits on plan changes absent legislation, officials suggested there were some other tweaks lawmakers could make to reduce costs without altering plan design. Those could include changes to require referrals to see specialists or new prior authorization rules, but it’s unclear which changes would comport with the legal bar on design changes.

The panel voted to request a legal opinion on whether they could invite the School Employees Health Benefit Program’s Plan Design Committee to discuss potential options for savings.

The committee on Monday heard proposals to reduce plan costs, including by raising copays to incentivize members to seek services more efficiently, limit the number of physical therapy and chiropractic sessions covered annually, and increase cost sharing for certain outpatient surgeries and inpatient stays that cost members less than a visit to their primary care provider.

On Thursday, union officials and school staff from districts around the state urged the panel to forestall rate increases, warning of the impact another hike would have on districts’ offerings and the plan’s membership.

“Before improving increases of this magnitude, the question must be ‘at what point does the cure accelerate the disease,’” said Joe Tuma, president of the Piscataway Education Association. “Educators and school districts simply cannot absorb increase after increase. We need a sustainable SEHBP, not one where every rate hike makes the next rate hike more likely.”

Separately, the panel voted to revise rate increases it approved for retirees on Medicare at a meeting last month. Their rates were set to rise by an average of 6%, but those increases were reduced to 3.7% for Medicare Advantage members and 4.1% for Medicare Supplement members.

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