Some N.J. school workers will pay more for health benefits next year as state approves rate hike

Days after state and local workers were hit with hikes, a state board on Monday approved a double-digit increase on health insurance premiums for some teachers and school employees in New Jersey next year.

The state’s School Employees’ Health Benefits Commission voted 5-1 to increase rates about 15% for the 2023 calendar year for those enrolled in the state’s health benefits program for school workers.

School districts cover the majority of the cost of insurance plans, while employees pay the rest. That means workers will pay more out of pocket and districts will shoulder bigger costs, which could in turn affect taxpayers through either higher property taxes or cuts to programs and staff. New Jerseyans already pay the highest property taxes in the nation on average, and the largest portion of their bill goes to schools.

Monday’s vote comes five days after a separate state health board voted to approve controversial double-digit rate hikes on health insurance plans that cover more than 800,000 state and local government workers. A last-minute deal between Gov. Phil Murphy’s administration and labor unions limited the burden for state employees. Plans for municipal and county employees will increase by nearly 23%.

State officials have said the increases are the result of numerous factors, including the increased cost of health care, inflation, and the lingering effects of the coronavirus pandemic.

The hike approved Monday affects only school districts that utilize the state’s health plan. Other districts get their insurance through private plans. About half of New Jersey’s 600 districts take part in the state plan.

The New Jersey School Boards Association opposed the decision, saying the increases are “far higher” than those in recent times.

The group also noted the increases come after many district budgets have already been finalized, which could force school boards to slash programs or fire staff.

“The move could have a very negative impact on district budgets — and ultimately undermines student achievement,” NJSBA President Irene LeFebvre said in a statement.

Dr. Timothy Purnell, the group’s executive director, called on Murphy and the state Legislature to “provide relief to local boards that have been affected by this.”

Carl Tanksley, the NJSBA’s acting general counsel and its representative on the health benefits commission, cast the only no vote Monday.

The New Jersey Education Association, the state’s largest teachers union, noted the increases come after two years of decreases in the premium rate for in health plans.

“Nonetheless, an increase of that size is always a cause for concern,” NJEA spokesman Steven Baker said. “That is why we demanded detailed information on the increase and did not vote on rates until we had that information.”

Baker urged NJEA members to instead enroll in the two-year-old New Jersey Educator Health Plan, which he said “provides high quality coverage at a much more affordable cost to our members.”

Danielle Currie, a spokeswoman for the state Treasurer’s Office, said “we share the concerns regarding the increase in rates and the effect it will have on public employees and employers.”

But Currie noted the process for setting rates is set by state law, and the rates are “largely formulaic, driven by the past year’s actual usage and projected costs, and ultimately decided upon by the Health Benefits Commissions.”

The panels that approve insurance rates for New Jersey public employees consist of both government officials and union representatives.

NJ Advance Media staff writer Derek Hall contributed to this report.

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Brent Johnson may be reached at [email protected]. Follow him at @johnsb01.

Tina Kelley may be reached at [email protected].

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